Members present:
                    Mr David Hinchliffe, in the Chair
                    Mr David Amess
                    John Austin
                    Andy Burnham
                    Mr Simon Burns
                    Jim Dowd
                    Julia Drown
                    Sandra Gidley
                    Siobhain McDonagh
                    Dr Doug Naysmith
                    Dr Richard Taylor
       RT HON ALAN MILBURN, Member of Parliament, Secretary of State, JACQUI SMITH,
     Member of Parliament, Minister of State, MR RICHARD DOUGLAS, Director of
     Finance, MR GILES DENHAM, Deputy Director of Children, Older People and Social
     Care Services, and MR NEIL McKAY, Chief Operating Officer, Department of Health,

  1.  Colleagues, can I welcome you to this meeting of the Select Committee and particularly
welcome our witnesses.  Can I also welcome the new members of the Committee who joined us
and some new "old" members who are back with us.  Julia in particular, it is good to see you. 
Secretary of State, can I thank you and your team for coming along at a very busy time.  We
particularly welcome the new Minister of State; we are very pleased to see you here.  Could you
briefly introduce yourselves to the Committee.  Secretary of State?
  (Mr Milburn) Alan Milburn, Secretary of State for Health.
  (Jacqui Smith) Jacqui Smith, Minister of State with responsibility for community care.
  (Mr McKay) Neil McKay, Chief Operating Officer for the National Health Service.
  (Mr Douglas) Richard Douglas, Director of Finance.
  (Mr Denham) Giles Denham, Head of Social Care Policy.
  2.  Thank you very much.  Can I begin by saying that obviously the public expenditure
inquiry covers a whole range of areas and I apologise for roaming from one area to another.  Can
I kick off with an area that I have some concerns about at the moment, and that is public health. 
One of the issues I get raised with me at a local level is a concern about the future location of
public health.  I know talking to various people involved in the Health Service, particularly
public health around the country, that there is a worry that to some extent the focus that the
Government have had on public health may have been somewhat lost in recent times.  Is that a
fair criticism?
  (Mr Milburn) No, I do not think it is.  I know there are concerns right now which would be
unsurprising really.  We are going through a quite major set of structural changes and I think
many of the concerns about where the public health function is going to be discharged arise from
those changes. Let me share the dilemma with you that I had back in March when I made the
announcement about shifting the balance of power within the NHS.  There was a choice for me
basically which was we could have continueed with the existing structures, and that was quite
a tempting choice given that the National Health Service has got well-used to lots of structural
changes over the course of the last 20 or 25 years.  However, my very very strong feeling, the
more I discussed this with people in the National Health Service, including with the public health
people, was the gathering sense that the existing structures, with a pretty large intermediate tier
of management between the Department of Health and the front-line in primary care trusts and
National Health Service trusts, was increasingly untenable.  What we have learned over the
course of the last four or five years is what we need is a combination of what I hope we now have
which is very clear national standards in place including, if I may say so, for public health - the
National Cancer Plan, a very strong national service framework for coronary heart disease, and
you are aware of the other measures, backed up now by inspectorates and so on and so forth. In
the end improvements in standards will not be delivered unless the people on the front-line feel
they have some control over the decisions taken and crucially over the resources as they are
available in the National Health Service.  I simply got too much evidence, I am afraid, of the fact
that the people at the front-line were not receiving the benefits they should have from the big
financial increases that have been going in, so I took the decision that it was the right thing to do
to, effectively to take out some tiers of management.  I know that is disconcerting to some
colleagues around the table because you are aware that some consultation is going on now about
the strategic health authorities.  I think it is true to say that there is a sense within the Service that
we are going through yet another structural change and, of course, I am concerned about that,
however I felt it was the right thing to do and, frankly, the right thing to take a risk because I do
not believe that in the end what we are going to get is the sort of improvements in services that
we require unless the people at the sharp end, whether it be primary care, secondary care or
anywhere else, feel they have greater ownership of the agenda  and indeed of the resources in the
National Health Service. There is a special place for public health in that.  I am quite happy to
talk further about how I think the changes we are introducing will strengthen rather than diminish
the public health function because I genuinely think that is what will happen.
  3.  You mentioned the strategic health authorities.  Will it be the key task of these new bodies
to address health inqualities?
  (Mr Milburn) Yes.
  4.  Explicitly?
  (Mr Milburn) Yes, explicitly.
  5.  Following on from that point, would the issues I get raised with me by health trust chief
executives - I am not just talking about my own part of the world but various parts of the country
- where they tell me they frequently get banged around the head by the National Health Service
Executive on the issue of waiting list targets but very rarely is the issue of public health
mentioned and, of course, these bangings on the heads relate to ministerial pressure on the
executives to deliver results.  When are we going to start banging our heads on public health?
  (Mr Milburn) I do not think the complaint about the National Health Service is that there is
too little banging around the head.
  6.  I do not think the banging around the head is the concern, it is the subject matter of the
banging around the head.
  (Mr Milburn) I think the complaint might be the reverse and we have got to get a valid
balance between pretty tough performance management - that is largely Neil's function and
Richard's too - and there is a sense within the Service now that there are strong national
frameworks and so on in place that can get on and deliver the agenda.  If I am critical of some
of the public health people I talk to, it is because I do not think that, frankly, they recognise that
what we are trying to do in terms of improving primary care or certainly improving waiting times
for cancer or coronary heart disease in terms of the outcomes that will be achieved, are important
public health measures.  They are important public confidence measures.  We are all aware of
that. Every time any one of us talks to any of our constituencies about the state of the National
Health  Service invariably the big concerns are about how long people wait, whether it is to see
a GP, to get an ambulance or an operation.  If we can make the sort of improvements that we
need to see and I think are now beginning to come through, particularly on cancer and on
coronary heart disease, which are at least as toughly performance managed an improvements
around waiting times and waiting lists, that will have an enormous public health benefit.  Over
the course of the last year or so I think we have been able to make some progress as far as cancer
services are concerned.  We know that cancer and coronary heart disease together kill a quarter
of a million people a year in our country.  We know that a lot of that is preventable, incidentally
through primary care rather than secondary care, and there we have some good stories to tell. 
We also know that if we can get people once they have got cancer or coronary heart disease into
the system more quickly than we are able to at present, that will have an enormous public health
benefit.  If I am blunt about it, I think people ought to get out of their ghettos a bit and stop
worrying about what is public health and what are waiting lists.  Everything that any government
should do as far as health and the Health Service is concerned should be about improving the
health of the population. That is what we are trying to do and I think what we have now got in
the service frameworks, the National Cancer Plan and, remember, targeted money directed at
these specific services to facilitate the improvements that are so long overdue, are the means of
achieving that.
  7.  Would you accept that when, for example, the Tobacco Advertising Bill was not in the
Queen's Speech a message did go out to the public health sector that perhaps the emphasis that
has been placed on public health since this Government came to power was not being strongly
reinforced by practical measures?
  (Mr Milburn) I hope not.
  8.  Obviously I recall the White Paper Smoking Kills and the commitment there.  We
committed, as I understand it, over 50 million over three years but that money has not been
spent.  I am told only 43  million will be spent of that amount and the figure that I am given in
terms of anti-tobacco campaigns over the three-year period including the current financial year
indicates a reduction in expenditure.  In 1999 -2000 it was 15.9 million, in 2000- 2001 it was
down to 13.73 million, and it is down in the current year to an allocation of 13.3 million.  The
point is the tobacco industry is spending ten times that amount of money on advertising.  It is a
very worrying discrepancy between the two figures.  I certainly anticipated that we would see
a radical difference from this Government to the previous Government's position on smoking and
  (Mr Milburn) I am very happy to check the figures for you  and send a note, if that is helpful;
I do not have them in front of me.  I hope that people do not get the wrong signal about this at
all.  We have got a Manifesto commitment to see through the Tobacco Advertising Bill.  I rather
hoped we would have been able to do that in the last Parliament.  Unfortunately we were not able
to for a variety of reasons.  We will introduce it when we are able to.  If we can find legislative
time soon we would like to be able to do that.  You are aware of the pressures now in particular
there are on the legislative timetable.  The Manifesto is for the whole parliament, not just for one
year or a few months. Secondly, what does amaze me about this decision about the tobacco
advertising thing is that it is an important public health measure and I remain profoundly
committed to it.  I believe it is absolutely the right thing to do and I believe that the last
Government had evidence it was the right thing to do but unfortunately did not legislate for it. 
However, I think the most important public health measure we have taken in relation to tobacco
has not been proposals around banning tobacco advertising, it is about helping people to quit
smoking.  Two-thirds of smokers say they want to give up and they want help to give up and
until this Government came into office there was not any help available for them other than them
paying for that help themselves.  The fact that we have made nicotine  replacement therapy
available on prescription and Zyban available in a similar way is producing results and, as I said
yesterday in Health Questions, we would have expected by this stage to have some 45,000 people
due to quit smoking thanks to the smoking cessation services that we have developed whereas,
in fact, we have got around 65,000 so far, and the programme will go from strength to strenght. 
Politicians claim a lot, of course they do, but when I go around the world and talk to people about
what we are trying to do in public health, people recognise we have got the best smoking
cessation services anywhere in the world and we should be proud of that.  I find it pretty
difficulty, frankly, to square the idea that somehow or other there is a lack of commitment to deal
with the scurge of tobacco and the appalling health consequence that it has with the health
measures we are putting in place. We will come back to the Tobacco Advertising Bill in due
course.  We need to make sure that as much help, as much support as possible is available to
people who genuinely say they want to give up.  The advertising campaign we have got running
is an important means to that end but the more direct intervention in my view is through precisely
the sort of therapies that are available, particularly for smokers who find it difficult to quit.
  9.  Coming back to my point about the new strategic health authorities, your reply to our
question 3(1) implies that the Department will not be monitoring what happens to public health
targets.  How are you going to ensure that PCTs are meeting these targets and, if this is an aim,
what mechanisms are in place to ensure those results occur?
  (Mr Milburn) I was going to say this earlier about why I think that what we are doing in
terms of shifting the balance of power, wiping out the current health authorities, getting rid of
the regional offices, devolving power down to PCTs will really make a difference in public
health terms.  Many of these problems we have got in relation to public health are more general
problems arising from poverty, deprivation, poor  housing, drugs problems and so on.  I think
for too long, frankly, there has been an argument around in the public health world, and
elsewhere in public services, that dealing with those problems was nobody's particularly
responsibility.  It is actually everybody's responsibility.  If you are going to deal with these
problems that arise about drugs and crime and poor housing on council estates, as we know, what
we need is a variety of agencies to come together.  I think that getting the power and getting the
resources in the Health Service away from what are certainly in my part of the world a pretty
anonymous bureacracy located 20 or 25 miles away from Darlington into a Darlington-based
primary care trust that, remember, will have as part of the PCT overall budget 75 per cent of the
overall N HS budget in its hand, will facilitate much closer joint working together on the ground. 
What I would expect to see is the local primary care trusts coming together with the the local
authority, with the local Police Service, voluntary agencies and others, not just to deal with health
in the narrow remit, providing Zygon on prescription or whatever, but dealing with some of the
root causes that we know give rise to these appalling pockets of ill-health that we see in many
of our towns and cities across the country I think getting money out to the front-line will aid and
abet public health rather than in some way restricting the public health for all.  It is important to
remember, too, that in the new primary health care structure what we want is in every PCT there
to be a public health team dedicated to carrying out the public health function.  As far as the
strategic health authorities are concerned they should be that - strategic - and they should get out
of the business of putting their noses into the day-in day-out running of the National Health
Service.  That is not their job.  The people who do that should be the people at the front-line.

                             Mr Burns
  10.  Secretary of State, you have been talking recently and quite a lot in the past about targets
ensuring the delivery of improvement and  enhancement of public health.  Are you not
concerned, though, if all that you are aiming and aspiring to achieve were to be undermined by
things like the BMA survey which was published today that says morale is rock bottom.  One
in four family doctors actually want to quit the National Health Service and their GP function
because 95 per cent think their workload is far too great and they do not see a future for
themselves.  If you have that low morale in what is to all intents and purposes a destabilisation
of the whole GP network, how is the Health Service going to be able to move forward and meet
its targets when on top of that one has a situation where there are serious staff shortages, and
despite what your Department and you are seeking to do to get more trainees in it would seem
that less and less people are going into higher education to train to be doctors and nurses.
  (Mr Milburn) I do not think it is true and I think the competition for places remains very
strong.  Just two or three Fridays ago I met with a group of potential medical students in my own
constituency at the sixth form college.  It was great to see them.  They were extremely
enthusiastic about it.  They wanted to go into medicine but they did not have the certainty of a
place and why not?  Because they have got to go through a competitive process.  Of course they
have.  What we are doing, as you well know, is dramatically expanding the number of medical
school places now. They will increase by 30 per cent by 2004.
  11.  Those are places.
  (Mr Milburn) There are more doctors coming through all the time.  It is true that for the last
set of figures that were published the results were disappointing for GPs. I expect the next set of
figures to be much more welcome both as far as the public is concerned and perhaps even the
British Medical Association too.  I expect to see more and more people coming through. PMS
is beginning to take off in a way that many people had said was not possible in the past.  The
salaried GP option is proving very, very attractive, particularly for younger doctors.  When I talk
to younger doctors  very many of them say to me that they do not want to take the risk of buying
into a business because that means a stake for life.  Young people want to spend a year in
Australia or whatever and good luck to them. What we have got to do is provide them with more
choice and some of the choices we are providing are more flexible working so women can come
back after having children to to work in general practice or in nursing or elsewhere.  We have got
to give them a salaried option because that provides more opportunities too. Yes, of course there
are concerns about what the BMA Survey says today and we are working very hard, incidently
in collaboration with the BMA, to address some of these concerns, and making general practice
more attractive both to come into and stay in.  I do not know whether you have had the
opportunity to read the survey.  What I found heartening about it in particular was amidst the
myriad of concerns in the survey, there was one very, very important thing struck me very, very
forcefully.  GPs are working incredily hard, they are under a huge amount of pressure, and we
need to do everything in our power to alleviate that pressure and to get more family doctors into
the Service.  Despite all of that, a clear majority of GPs were able to say that as far as they were
concerned primary care services over the course of these last few years rather than deteriorating
were improving.  I think that is down precisely to the hard work of those GPs and we have got
to build on that, dealing with the recruitment and retention problems.   I am not gloomy about
it at all. In fact, I think the range of measures we have put in to  improve recruitment and
retention, particularly of family doctors, is going to make a real difference. You can see that in
nursing already; you alluded to nursing.  Three or four years ago if I had come to this Committee
virtually the sole topic of conversation would have been about the nursing shortage crisis.  It is
true we still have shortages of nurses, that is absolutely true, but we have got 17,000 more nurses
now than we had then, we have got 7,000 more doctors.  My own view is that we have turned
the corner on shortages.  I think the applications coming through are up by a fantastic number
for both diplomas and university degrees for nursing.  Where we have now got to focus the
attention is not so much on recruitment as on retention. We have got to make it much more
worthwhile for staff to stay in the National Health Service.  That means pay, how you employ
people and it means what help you give to a million staff to help them balance their family and
their working lives, which is why we have this big commitment, for example, to improve
childcare facilities.
  12.  Thank you, Secretary of State.  Can I come back to that.  One of the things you said was
that you were reassured, pleased by the number of doctors coming through and taking up
appointments but, given your pleasure at that, have you also considered the number of doctors
at the other end of the career span who are taking early retirement and are leaving the profession
for the very reasons highlighted by the BMA Survey today?  Could you give me now figures
showing how many of these new doctors are coming through and how many in the same
timescale are retiring and whether there is a net gain or loss?
  (Mr Milburn) I cannot give you them now but I am very happy to send you a note.  I think
what you will find is that although there is much talk, particularly in sections of the medical
press, about the appallingly high rates of retirement, the actual rates of early retirement are barely
budging.  I have heard that story now for the last five years and every year I have waited for the
great retirement bulge to feed through into a mass exodus from medicine, nursing, midwifery and
health visiting.  A lot of people talk about it but, frankly, I think there is quite a lot of
scaremongering about it and in actual fact it has not come about.  We have got to work doubly
hard to make sure that we have got the best people working in the National Health Service and
make sure we can help them stay in the National Health Service and that means, unlike in the
past, we have got to move away from staging their pay, which is what used  to happen, we have
got to make sure there is appropriate child care in place for them and crucially, back to the
opening point the Chairman raised, I think it is really really important if people stay with any
service that they have got to feel some sense of ownership over it.  That is really important.  It
is important for anybody in their working lives, even Members of Parliament want to feel a bit
of ownership of the agenda day to day.  I think it is quite important that the jobbing consultant,
the jobbing family doctor, the jobbing nurse, the people who actually deliver the care day in, day
out actually feel as if they have got a bit more ownership which is why it is really important, in
my view, that we get these resources and these powers and responsibilities out to the front line. 
I am greatly heartened and I think the numbers coming through training in particular are very,
very good indeed and I would be very glad, Mr Burns, and the Committee, to send you a note. 
I hope you will share the pleasure in the big increase that we are seeing and that we will continue
to see in future years.  

                            Dr Taylor
  13.  Secretary of State, I think I am already known as a bit of a scaremonger but I really want
to alert you to what really is my very severe fear.  In the early 1970s a lot of GPs came from
foreign countries to particularly the urban areas of the West Midlands, South Wales, they are
coming up to retirement.  Surely that is going to lead to the retirement of a large number who 
it is going to be extraordinarily difficult to replace.
  (Mr Milburn) I think there are a number of things that we have got to do.  It is very important
in my view that we do not just focus at the entry end, we have to focus at the exit end.  The worst
possible thing to happen would be that we had huge numbers coming through the front door and
then even bigger numbers leaving through the back door.  We are conscious of that which is why
when we announced the package of measures that we discussed with the General Practitioners
Committee of the BMA prior to launching it we put as much emphasis, if you like, on golden
hellos as golden goodbyes.  We want to make it more worthwhile for people to stay on in their
careers.  What I can say to you is that although there was a bit of pooh-poohing of these
initiatives at the time actually the money is beginning to bite and it is the amazing thing about
the National Health Service, as you are aware, that behaviour tends to follow cash.  That is a very
simple thing to keep in mind.  I think there are some short term things that we have got to do in
terms of making it more worthwhile for people to stay with the National Health Service and not
retire earlier.  In the medium term, and I think this is quite a big change but I do think this is
where we have got to get to, it seems to me, almost perversely, that what the National Health
Service, unlike most other organisations, asks its key employees to do as they come up to
retirement is to get them to work even harder.  Now I think we have got to change that and I
think we have got to get into a position, particularly with doctors, where essentially we are
looking at three phases of their career, and this is what we are trying to achieve through the
consultant contract negotiations with our colleagues in the BMA.  In phase one doctors come
through, they qualify, they are enthusiastic in the NHS and hopefully they are working pretty
damn hard, and we want them working for the National Health Service which is precisely why
we propose that providing we can reach agreement it would be good if newly qualified
consultants were prepared to commit 100 per cent to the NHS for up to seven years.  Then they
will have a second phase when they are well established, when they become experts in their own
right and where, providing again we can reach agreement, it seems perfectly reasonable to me
that if they want to build up a modicum  of private practice that is absolutely fine providing we
can get a good deal for the NHS, and of course we will pay them more.  Work more for the NHS
and we will pay them more.  The third phase of their career has got to be this.  I think rather than
expecting people to work as hard in their sixties as they did in their thirties, what we should
move them towards is much more mentoring, much more training so that actually they are
bringing on the next generation of doctors.  I think that is as true in primary care as it is in
secondary care.  That seems to me to be quite a big change, quite a big cultural change to effect
but if we can do that I think the benefits  all round both for the older doctor and for the younger
doctor having the experience passed on to them of people who have been in the system for very
many decades will be enormous.  Now what we have got to do is make sure that is not just an
aspiration, what we have got to do is have the means to effect that.  If you take my simple
proposition that behaviour tends to follow money then what we have to have is a consultant
contract and a GP contract too, which we are busy negotiating, which facilitates precisely that
sort of structure in the workforce.
  14.  Mr Chairman, the length of that answer is really teaching me a lot about what it means
to be a top politician.  I am certainly learning very fast.  What really bothers me basically is that
you have outlined all the benefits, there are not going to be literally the bodies to take up those
benefits when this huge efflux goes of people from abroad who are retiring.
  (Mr Milburn) With respect, I think you are wrong about that.  You want to have a look at the
numbers coming through.
  15.  I would love to.
  (Mr Milburn) I will gladly show them to you.  The Committee can have a look at what the
training numbers in particular look like.  In the short term it is true that we have a problem
precisely for the reasons that you are well aware of, that it takes some considerable time to train
doctors and frankly because in particular - and I think was one of the more foolish things that
happened in the past - the number of both nurse training places and sadly the number of GP
training places were cut back, we have had to pick up that infrastructure again.  Remember it is
important that we have the trainers to do the training.  In the short term there is a gap and we, as
you are probably aware, are actively looking abroad now to see whether we can bring in doctors,
not from developing countries where the governments are unhappy about that but from countries
like Germany and Italy and Spain where there are a surplus of doctors, and even America.  I was
in America last week in Washington and what I found amazing about being there was the sheer
interest, not just in the National Health Service but in the reforms that we are introducing in the
National Health Service.  Many people talk, they talk about the changes that are being introduced
and actually here the changes are being implemented.  I believe profoundly, and certainly from
the number of inquiries that we have had thus far from America and elsewhere, that what you can
expect to see are very high quality people coming to work in the United Kingdom in our National
Health Service because they rather like it.  It would be good if all of us, every one of us,
particularly in key decision making roles, talked up the National Health Service rather than, as
some seek to do, running it down.

                           John Austin
  16.  You have talked, Secretary of State, about the pressure on decision makers from
consumers, from the public, from the medical profession, the pre-occupation with waiting lists,
waiting times.  I recognise this and you have talked about the need for effective monitoring and
measuring.  My concern is, and the way in which the questioning has gone and the answers in
this session so far is indicative of some of this, that we started talking about the public health
agenda and very rapidly moved off it.  You referred in your comments on coronary heart disease
to the very significant improvements that are taking place in primary care, in secondary care, in
treatment, in outcomes, in survival but when we actually look at the incidence of coronary heart
disease, particularly among people of my and your generation, there has not been any significant
reduction.  One of the issues is that public health measures which can be taken are the ways in
which people can begin to bring that down.
  (Mr Milburn) Yes.
  17.  But they are not immediately measurable in the short term.  I think my theory is that
unless there is some way of ensuring the funding for public health that with all these other
pressures the public health agenda is going to slip down the priority list.
  (Mr Milburn) But what is public health?  Public health is largely delivered in primary care. 
That is where it is delivered.
  18.  As far as the NHS is concerned.
  (Mr Milburn) Yes, absolutely.
  19.  A lot is outside of it.
  (Mr Milburn) Exactly.  That is why we have got to forge alliances between the National
Health Service and other agencies and organisations and communities precisely in order to deal
with the root causes.  What I have never believed is that somehow or other it would be a rather 
perverse proposition that somehow or other the National Health Service of all organisations in
the country did not have a leading role to play in improving the health of the public and that is
what we have got to do now.  Where is public health best located?  The answer to that, it seems
to me, is in primary care.  As I was saying on the floor of the House yesterday in answer to
questions, inevitably for perfectly understandable reasons you know people when they talk about 
heart disease, for example, their biggest concern will be about how long people wait for a
coronary artery bypass graft, a heart operation, and we have to do a lot more to save lives and get
the waiting times down.  Actually when we came to do the modelling for the National Service
Framework that we published last year, what struck me so forcibly was the number of lives that
we can save by doing some very simple things, secondary prevention in primary care, by
prescribing aspirins, by prescribing beta-blockers, by prescribing statins, which far outweigh in
outcome terms the consequences of improved waiting times for a heart operation and there the
news is genuinely good.  Now it is not genuinely good for Richard, as the Director of Finance,
because in the course of the last year the expenditure on statins has risen by around 30 per cent
but it is a good thing in public health terms because that is reducing the incidence of people
having a second heart attack.  The fact that we have got heart disease registers now being
established in primary care with GPs looking out for the signs of heart disease and those prone
to it is an enormous public health gain.  These are big public health measures in their own right. 
Sometimes when we have this debate about public health, people think the only people who do
public health are the public health doctors.  It is not the public health doctors, every doctor does
public health and chiefly public health is taken forward by GPs in primary care, by health
visitors, by community nurses, by community midwives too.  What we have got to do is give
them the resources and the ability, operating within the national framework I described earlier,
to make sure that we can really bear down on some of the awful incidents of these killer diseases. 

                             Jim Dowd
  20.  I take your point about the broader nature of public health.  If I can look at one of the
initiatives this Government has taken since 1997, and that is Health Action Zones.  We have one
in my area - Lambeth, Southwark, Lewisham - a Health Action Zone, the whole programme
could have been designed with that kind of area in mind, pockets of deprivation in towns and
cities, in one of your earlier answers this fits archetypally into the area.  
  (Mr Milburn) Yes.
  21.  I have a good relationship with them.  They are doing a lot of work.  They are looking
at very original and imaginative ways of approaching the age old problem.  There is a lot of
money being allocated to the 26 which now exist.  How are you going to ensure that they are
actually  meeting the objectives rather than just doing good work and the acid test of that will be
in reduced numbers with coronary heart care and cancer cases etc in some of the inner urban
areas, which are not only the most deprived but have some of the most deeply entrenched and
worsening public health problems?
  (Mr Milburn) I think the answer to that is the same as the answer to how we ensure that PCTs
carry out their public health function, which is that we monitor them.  We have an accountable
system in this country which is a real strength actually, I think, for the health of the population
and we have a means of doing that now.  We have got a performance assessment framework
which covers a number of areas of activity, whether it is Health Action Zones, PCTs, NHS trusts,
Uncle Tom Cobbley and all have got to account against.  There was a time, I will be frank with
you, when for the first couple of years, we were not monitoring the Health Action Zones as
actively as we should have done.  I changed that I think last year partially because I was
concerned that some of the initiatives that they were undertaking, although they were good things
in their own right were not focussing on what we know really makes a difference because if we
can bear down on smoking, if we can improve diet and exercise, if we can ensure that in primary
care people are taking sensible, pretty straight forward steps to monitor health incidents then we
can make a big difference.  That was not happening everywhere, I cannot remember whether it
was happening in your area or not, I hope it was.  We changed the regime so there is actually
much tighter monitoring of the Health Action Zones now.  What I want them to do is to spend
the majority of the resources that they get, which are quite considerable, on precisely the areas
that we know will  make the greatest difference on dealing with coronary heart disease, on
improving cancer outcomes, on dealing with the things that I have been discussing with Dr
Taylor.  I think that in all of these cases I want to assure the Committee that what we have is a
means of the local health service being able to account for its performance, not just on the narrow
issues of acute elective activity or recruitment and retention rates but on the broader public health
measures too.  With one caveat, you have made the important point and it is absolutely right, we
should be bold about this and very straight forward with the public.  To get where we need to get
to in terms of  improving cancer outcome rates or heart disease outcome rates is not going to be
achieved in one year or two or a Parliament, it is going to be achieved over a period of time. 
That is why all of the frameworks that we publish and all of the plans that we have published are
deliberately long term and I think unashamedly so too.  What we have got to be able to do if we
have got long term plans in place is to be able to demonstrate year by year improvement.  Now
in some of these things, to be frank with the Committee, it is pretty hard.  You saw that very,
very recently, I think, there was reference in the newspapers to improved cancer outcome rates
but those figures referred to several years ago because we are always behind the mark in terms
of measurement.  We need to improve that and we have got some things in train that will allow
us to do that.  That aside, what we should do with every part of the NHS is make sure that the
appropriate monitoring is in place so that we, as decision makers, but more importantly members
of the public can actually see where their money is going and what results they are getting.

                             Mr Amess
  22.  I have been listening very carefully to your hopes and aspirations for the Health Service
but how can this Committee take your utterances seriously when we consider everything that you
and your fellow ministers have said about waiting list targets for the last four years?  I am not
going to embarrass you by reading out the responses that you have given to Committee Members.
  (Mr Milburn) Generous to a fault as always, Mr Amess.  Generous to a fault, well known for
  23.  Defending staunchly why these targets were so marvellous and how it was sensible to
put extra money in, etc.  Then breathtakingly in June after four years defending this rotten policy
you said "There will be no waiting list target but there will be a concerted drive to reduce waiting
times" and yet when Her Majesty's Opposition had tried to persuade you of that position you did
not want to know.  How is it that you suddenly changed your view on that very important issue
after four years?
  (Mr Milburn) I do not think Her Majesty's Opposition liked the change either because you
do not like either the waiting list or the waiting times target.  However, let me explain what we
have to do here because this is very, very important.  When we came into office in 1997 the
major public concern was about the length of the waiting list because it had been rising and, in
fact, I think during the course of the previous administration had risen by about 400,000 from
around 700,000 to well over one million.  Of course there were public concerns about that and
it is right that we deal with public concerns because in the end the NHS, just like any accountable
organisation, has to command public confidence.  We succeeded in doing what we said we would
do, which is to get the waiting list down.  We managed to do precisely that, we got the waiting
list down by over 100,000.  These things do not stand still, we go on from year to year trying to
make improvements.  Because we have managed to achieve what we set out to achieve on
waiting lists, compare and contrast 400,000 rise against 100,000 fall, we can move on to our next
ambition and our next ambition is to get the waiting times for treatment down.  Let me just finish
the point.  It is very, very important for people.  People do not like waiting 18 months for an
operation, whether it be a heart operation or a cataract operation, and rightly so.  Actually, I think
that we are making good progress on this.  I wish we could go faster but the capacity constraints
are such, the shortage of doctors, the shortage of nurses, and until very recently the shortage of
beds which had been falling for 30 years and are now rising again in hospitals, mean that we have
got to take this thing stage by stage.  What I can say is from a position where we had a maximum
18 month waiting list, by March next year we will have a maximum 15 month waiting list.  In
fact, I expect very many NHS trusts to do even better than that.  Some NHS trusts are already
achieving six months.  My own trust in Darlington has long achieved a maximum waiting of 12
months.  Within that we will make even faster progress still particularly for coronary heart
disease and for cancer, the clinical conditions that affect most people most severely.  That is the
simple reason for it.  You are speaking for the Opposition here today obviously but I just hope
that what people have been clamouring for they are now happy with which is, I think, a step in
the right direction.
  24.  My colleague is bursting to come in but I just want to pursue this point.  What you have
said is absolutely incredible.  Is not the truth of the matter that after four years the general public
more than twigged that it was minor operations that were being carried out before more difficult
ones in order to get these wretched lists down and it was the friends and relatives of people who
had serious operations needing to be carried out and it was through public pressure that you
dropped this ridiculous policy?  The whole point of this Committee is we are talking about
expenditure on the Health Service.  Are you actually telling this Committee that you are not
admitting that this policy that you pursued for four years was wrong?  Are you also expecting
us to believe that the extra money that you deliberately put in to pay these consultants - I have
had so many conversations with them about what was going on - was not in order to get the
smaller operations carried out quickly so that these figures would look good?   You are seriously
expecting this Committee to believe that, are you?

  (Mr Milburn) Yes, I am.  In fact, you can see from the figures, and again I would be quite
happy to share the figures with you in due course, when you have a look, for example, the big
expansion that has taken place in heart operations.  A heart operation is a major operation, heart
disease is a serious clinical condition.
  25.  Yes.
  (Mr Milburn) And there have been big increases in the number of heart operations.  So the
charge that somehow or other the only operations that were being done were toenail clipping
rather than heart operations just simply does not stack up.  I think the other important point to
bear in mind is this: there is a direct correlation between the number of people on the waiting list
and how long individuals wait in terms of waiting time.  If I go to the supermarket, when I have
bought my goods by and large I do not go and join the longest queue, I try to join the shortest
queue because I am going to get through the till most quickly.  What our modelling suggests
very, very strongly, and I think you can see some of this already in terms of the impact of the
inpatient waiting list on waiting times, is whether you reduce inpatient waiting lists or your focus
is on reducing inpatient waiting times the two come down together.  That is what we have got
to achieve.  I think the most important thing from the patient's point of view, from the point of
view of the individual patient, is to know that the National Health Service is moving in the right
direction, that if you have got a serious condition or any form of condition that the National
Health Service is going to be there for you and it can deal with you in a timely fashion.  If you
ask me right now whether people wait too long for a hospital operation, of course the answer to
that is yes, it must be yes.  What we have got is a determined effort to get them going down.  As
you can see from the big reductions that have taken place in the number of people waiting over
12 months already from the peak just a few years ago this can be done and it is being done in
certain NHS trusts.  The big question that should concern all of us is this: if some NHS trusts,
if some hospitals, can manage to achieve a maximum waiting time of 12 months, let alone six
months, then why on earth can every NHS trust not achieve that?
  26.  I find it more and more incredible but on that specific point, if you turn to Table 4 16.9
you will see that the total number of people being removed from the waiting lists for ordinary
and day care has actually been falling since March 2000.  Moreover, there is a pattern of falling
for admissions since March 1999.  That is in that table.  How did you work out the new waiting
time targets?
  (Mr Milburn) We modelled it.  I think it would be reasonable to share with the Committee
some of the modelling that we did.  We modelled it and I think that is perfectly fine, you can see
that for yourselves.
  27.  And you took into account falling nursing home beds?
  (Mr Milburn) And we took into account a range of factors.  We took into account not just the
extra investment that was going in.  Remember the investment that is going in is now at twice
the rate of the past, which allows us to go at least twice as fast.  We also took into account some
of the changes that need to take place in how care is delivered.  Let me just finish this point
because I think this is really important.  I do not believe that in the end the way that you will get
the big reductions in waiting times that patients nowadays expect to see out there is simply by
cranking the machine even harder, it is not achievable by that.
  28.  Just one or two very, very quick points.  Just for the record then, you are confident that
you will achieve these waiting time targets?
  (Mr Milburn) Absolutely, yes.
  29.  The final point is when you came before the Committee in November 2000 we had an
exchange over naming and shaming Southend Hospital.  This was all about the consultants and
on this particular proposition of targets.  One colleague is going to talk about the hotel star rating. 
How do you justify that you announced hotel star rating for hospitals when Parliament was not
sitting and given we had an exchange last November you actually had the audacity to give
Southend Hospital, which serves four constituencies, a one star hotel rating.  So in our exchange
in November, which is on the record, you said you were going to do a great deal to help, we were
going to boost staff with all sorts of initiatives, a Government Minister came down, and now you
have given our hospital a one star rating.  Who was the idiot, absolute idiot, who thought up hotel
star rating and could not see the terrible effect it has had on staff morale in my own local
hospital?  An absolute disaster.
  (Mr Milburn) I gather that you are not very happy with the policy.
  30.  I am not, no, and even the doctors, nurses and consultants are outraged.
  (Mr Milburn) Even I, with respect, Dr Taylor, as a politician got that message.
  31.  It is a disgrace.
  (Mr Milburn) I know you think it is a disgrace and I am extremely sorry for that.  The reason
why it got a one star rating is that is what it deserved according to the figures that were measured. 
If you do not know this as a Member of the Health Select Committee you should.  The truth
about the National Health Service is this: there is excellent performance, there is indifferent
performance and I am afraid in some parts of the NHS, to be blunt, there is bad performance. 
Every patient knows that, every doctor knows it, every nurse and every manager knows it; every
politician should know it too.

                          Sandra Gidley
  32.  Fun though it may be to attack the record I am more interested in looking forward to
what may or may not happen.  One of the side effects, if you like, of the 18 month target is that
people are now waiting an extraordinary amount of time before they can see a consultant,
particularly in the orthopaedic fields.  It is locally 52 weeks if you want to see a specific
consultant and I was recently quoted somebody who had to wait 92 weeks to see a consultant in
the NHS.  What is being done to address this problem centrally?  I know there are some local
initiatives that are working quite hard on this.  Will the change to the 15 months actually worsen
this problem?  The other aspect of the problem which I would quite like to explore is the fact that
local GPS are in fact very hampered, they are very restricted in where they can send the patients. 
It is a fact that if 40 miles down the road there is a hospital with a three month waiting list GPS
cannot send patients there.  When budgets are devolved to PCTs will there actually be a greater
freedom for GPS to spend the money where they want and without excuses such as destabilising
the local health economy?
  (Mr Milburn) I think that is one of the very real benefits that we will see.  In most parts of
the country, it is not true in every part of the country, there tends to be a monopoly health
provider.  In Darlington there is one hospital.  The next hospital is in Bishop Auckland, it is ten
or 15 miles away, Durham is the next one, 20 or 30 miles away.  By and large people would
choose and GPS would choose, quite rightly, to use their own local hospital for perfectly good
reasons.  If you go to any hospital nowadays one of the most noticeable things you will see is that
there are a lot of very, very elderly ladies in the wards, old people who tend not to be mobile and
want to be as close to home as possible.  The local hospital will remain a very important focus
and it will be a matter for the primary care trust rather than anybody else to decide who on earth
they should contract with.  My own view is that I think we do need to see more choice being
made available to patients and to GPS.  I think we can get there.  Over time I think we can get
to a position where  as we get improved information technology in the GPS' surgery, in three or
four years' time we will be in a position where you as a patient, and your family doctor, will be
able to sit down together and decide not just on when the hospital appointment should be at your
convenience rather than at the system's convenience but also the location of the hospital
appointment.  Frankly, if there is a shorter waiting time in a hospital that is ten or 15 miles away
rather than the one around the corner, and that is where you as the patient want to go and it is
where your GP wants  to send you then we have got to be able to facilitate that.  That seems to
me to be eminently sensible, precisely bearing in mind the point I made earlier that there is good,
bad and indifferent performance.  Indeed, in neighbouring hospitals, as you well know, you can
get quite short waiting times and quite high waiting times, sometimes for pretty inexplicable
reasons.  The patient, nor the family doctor, should not be the person who suffers the
consequence of that.  That is the first point referring to your latter point.  On your first point you
raised, which was about long outpatient waiting times, you are quite right, the outpatient waiting
times, just like inpatient waiting times, are too long.  We have got a lot of people who wait over
26 weeks for an outpatient appointment at the moment, even more who wait over 13 weeks.  I
hope you will take some comfort from the fact that over the course of the last couple of years in
particular there have been very, very large sharp reductions in the number of people waiting for
an outpatient appointment and we have set further targets to ensure that not just do we get to a
15 month inpatient waiting time maximum but we also get to a 26 week outpatient waiting time. 
We aim to do that by March next year and then we will go further still in the years that follow. 
Over the course of the next few years we want to get down to our maximum outpatient waiting
time of three months and we want to get down to a maximum inpatient waiting time of six
months.  I think if we can get there stage by stage what people will begin to see is that these
things which have only been possible in some hospitals thus far are possible across the whole
National Health Service.
  33.  This is a problem because there is no mechanism that I can see in the health service for
spreading this best practice.  I am also very interested in why one trust delivers and the
neighbouring trust does not.  There does not seem to be much interchange between the two to
expedite that.
  (Mr Milburn) That is an accusation that you could have fairly levelled in the past, I hope it
is not an accusation that you can level now.  We have a whole apparatus for spreading good
practice, as it is called, including a new Modernisation Agency whose sole job is to do precisely
that.  Its whole raison d'etre is to learn from the things that are going right in pockets within the
National Health Service and spread their benefits elsewhere in the NHS whether it is a question
of how long people wait on trolleys in an A&E department or how long people wait in this city,
for example, to get a GP's appointment.  You know people wait weeks on end and in some
surgeries they wait 48 hours.  I think there are profound questions to ask about why is it possible
that between a third and a half of GPS already can deliver a maximum waiting time for their
patients of 48 hours while other GPS say that is absolutely impossible.  It is not impossible
because it is already being done.  What we have got to have is both the means to spread best
practice first of all through the Modernisation Agency and other devices but, secondly, I think
we have got to have the incentives in place so that people who have already improved get a
reward and people who need to improve see that there is some reward around the corner if they
actually get on and improve.  That is what we are trying to introduce.  Some people do not like
it but the NHS is an unusual organisation in that our tendency rather than rewarding the good
tends to be to bail out the bad.  I think that is a perverse incentive and we have got to change it
and we have got to have the courage to do that.  Sometimes that will be in the face of people who
actually work in the NHS who do not like it but I am afraid that is what needs to happen if we
are going to make sure that we do not have short waiting times in some places but we get them

  34.  I am anxious to bring in the Minister of State on the area you are responsible for of the
community care side.  Before you have a breather, Secretary of State, can I just throw one final
point at you.  We set off talking about public health and rapidly got into waiting lists and waiting
times but how can we make public health more politically sexy and does Government have a role
in this respect?
  (Mr Milburn) I will tell you what is interesting.  Every time we do a story about cancer and
what we are trying to do it always gets into the newspapers but every time we do a story about
coronary heart disease it never gets into the newspapers.  I do not know what the answer to that
is but maybe the answer lies on the table to my right rather than to me.  Frankly, I think part of
the reason is that with coronary heart disease it tends to be a much more working class disease. 
You know that yourself from your own area.  Unskilled men run three times the risk.  Just
because it adversely affects disproportionately one part of the population should not mean that
it is not a concern for the whole of the population, because it is, and we have just got to keep
ensuring that there are both the focus and the resources there to really make a difference.  In
terms of so-called sexy initiatives, part of it is through advertising and so on and so forth.  The
anti-tobacco advertising campaign that the Department is running is pretty effective and winning
awards and so on and so forth.  It is important to get these messages out to people.

                            Dr Taylor
  35.  Can I make one very quick point on that, to make it more sexy, more attractive.  The
public health doctor is becoming more and more a civil servant and this has been raised to me
by both public health doctors and citizens.  He used to be independent, the voice of the people. 
If you could make a new breed of public health doctor who really was the voice of the people,
that would increase the attraction tremendously.
  (Mr Milburn) I hope you are not alluding to the fact that civil servants are not sexy.  The top
table indicates it all too well.  No, I think you are probably right.
  Chairman: We had better move on from that, Minister.

                            Dr Taylor
  36.  We are going on to community and residential care, if we may.  Obviously it is very
good that the Government is committed to increase spending on intermediate care beds.  We are
very concerned that nursing home beds are being lost at quite a rate because of the increased
costs, the increased care standards, which obviously they do not object to and they approve of
but they are finding it very hard to keep up with those.  I got a letter just a day or two ago from
the Registered Care Homes Association of Hereford and Worcester, quoting "A growing number
of homes are in dire financial trouble, especially those who are unable to attract a sufficient
number of self-funding residents who in fact subsidise others".  So this local group for these two
counties is about to put up the fees per patient by 50 per week.  What bothers us is however can
you accommodate this tremendous increase in costs in nursing home care and still have money
to make the planned increase in intermediate care?
  (Jacqui Smith) The first thing, of course, is I have had that letter as well.  There is concern. 
We are concerned about the capacity within both nursing and residential care homes and that, of
course, was part of the thinking behind the announcement last week of the 300 million.  It
seems to me there are a variety of things that we need to do.  Firstly, I think we need to
recognise, and care home owners and local social and health care economies recognise this and
all of us think it is a good thing, that we are in a situation where we need our services to change. 
So we do not need to maintain necessarily exactly the level  of capacity we have previously
because older people have said to us as a Government, and they will undoubtedly have said to
us as individual MPS, that what they increasingly want are the sorts of services that enable them
to stay in their own homes that prevent them from having to go into hospital in the first place but
help to promote their independence and rehabilitate them if they have been in hospital and they
come out.  So there is a challenge in the system which is about managing the capacity whilst we
also reconfigure and develop new services.  That was what last week's announcement was about
and that is what I know a lot of work at local and social health care levels is also about.  How can
we maintain that capacity and how can we develop new services?  One of the important ways that
we need to do that is by making sure that the sort of commissioning that happens locally is better
than it has been.  There have been authorities where quite frankly I do not think they have
involved their independent and voluntary sector partners and their care home providers in the
planning of their capacity in the way in which they should have done.  That was the reason why
John Hutton, my predecessor, firstly brought together the Strategic Commissioning Group at a
national level, the results of which were the agreement that we published last week alongside the
announcement of the extra money as a guide to the sort of practice that ought to be happening
at a local level to ensure that commissioning is better.  Involved in that as well, of course, will
be much better planning into the future of what sort of capacity of services we need so that care
home owners precisely like those who have written to both of us from Hereford and Worcester
have a bit more certainty into the future about what sort of services are going to be commissioned
and, therefore, how they can contribute to ensuring that those services are there for people.

  37.  Can I offer a slightly dissenting voice in this.  There was an assumption in your answer
that a contraction in institutional care policies may be a bad thing but there are certainly one or
two of us here who think it may well be a good thing.  I would put to you the concern that one
of the difficulties we have in this whole area is that this area of service has for far too long been
provider led by the interests of care home providers.  This Committee has been on a plane for an
hour and a half to Denmark and we have seen a country that has no care, no old people's homes,
they have moved away from that.  Is that not an objective that we should set and not be ashamed
of that, that we actually reduce the number of places?
  (Jacqui Smith) I am sorry if I gave the impression that I necessarily thought it was a bad
thing.  I think there are two challenges.  I said that I think it is important that we change the
system because older people want precisely those sorts of non-institutionalised methods of
support but we do need to maintain capacity at the same time, which is why, for example,
alongside a declining number of nursing and residential care places it is encouraging that, for
example, there are 30,000 more intensive home care packages being offered to families since
A symbol of the shift of service that is happening that most of us would accept is right, a shift
out of institutionalised care and into the sort of care that promotes more independence. 
Whilst we are reconfiguring the system we do have concerns about ensuring that we maintain
that capacity, that change happens in a managed way, that it happens in a way that brings
together partners at a local level to commission more effectively than I think they have done
in the past.
  38.  The next thing is to confirm that this really is new money, so often money that is
announced by ministers when we really look into it is actually included in the allocation that
the health authority has already had.  Is this genuinely new money over and above the
allocation that social service departments have?
  (Jacqui Smith) Yes.  This is not money that local authorities believe they were getting, it
is not money that has been allocated to social services, it is in addition to the investment that
was going to be made. The 700,000 in Worcestershire, for example, will make a significant
  39.  Have you calculated how mean extra beds it would fund?
  (Jacqui Smith) It would fund, for example, 7,000 extra nursing home beds, however I do
not think that is what it should be funding, I think it should be funding partly some extra
beds, where those are necessary.  I think in some areas it should be contributing to higher fees
for some of the services that are available in order to make sure the supply is there in the
future. I think it should be contributing to a better intermediate care provision.  I think it
should be contributing precisely to the sort of intensive home care packages to the measures
to promote independence that are going to be important if we are going to reconfigure the
system.  We have some strong targets about what we want to achieve with the money but that
is not about a given number of beds, it is about how the system is able to change, be managed
more effectively so that it delivers the sort of care for people in the right place and at the right
  40.  That is very encouraging.  You will, no doubt, realise the disappointments many of us
have had.  In my own case Mr Milburn promised 35 GP beds and we assumed those would be
funded, and the health authority said they can only fund 20, so to know that this is really new
beds is great.
  (Jacqui Smith) You will have no disappointments in me.  I think your constituents have
done quite well under this Government.

                           Mr  Burnham
  41.  I would like to hone in on the issue of private nursing homes because I think it is very
much linked to the question of the intermediate care bed policy.  It is anecdotal evidence from
bitter personal experience, I get the feeling that the quality of care in some independent
private nursing homes is very, very poor and it is of such a low standard that it is becoming a
risk to the people in the homes.  I do not know whether that is backed up by any evidence.
How concerned are you about the private and independent nursing home sector, do you think
it is impacting on the NHS?  Do you think it is making the NHS a more difficult job?  You
have looked at the inspections regime, do you have any plans to change it?
  (Jacqui Smith) Firstly, I do not think it would be fair to suggest that the sort of care that is
routinely provided in independent care homes and residential nursing homes care is
  42.  I am not saying across the board, there are patches that have very poor practice.
  (Jacqui Smith) We need to make sure that wherever you receive your residential care or
your domiciliary care, care provided for you in your home by domiciliary agencies, for
example, or other services provided in the social care field, that wherever you receive it is of
a uniformly high standard.  That, of course, is the reasoning behind the publication earlier this
year in the case of older people, of national minimum standards in relation to care homes for
older people.  It is also the reasoning for bringing in as from next April the National Care
Standards Commission to ensure that we do have a coherent inspection and regulation regime
across those social care services.  If you are suggesting it was not coherent before I agree with
you, it was not, and that is the reason for making the changes that we are going to be making
to the inspection and regulation regime.  Although, as Richard suggested, there have been
some concerns from care homes about how they implement those standards there have also
been a lot of welcome of  those standards precisely because I think care homes realise that, 1)
if everyone is confident they will get a good standard of care and 2) if that stand area of care
is regulated in a consistent way it actually helps.
  43.  I do not think there is a problem at all with the standards, it is problem in some ways
with the operators and the nature of the operators that are involved in the sector, some with no
track record  in  providing care becoming involved and taking over homes.
  (Jacqui Smith) I would be very happy to send you details of the standards.  That is why in
the standards some of it is about physical environment but probably, much more importantly,
it is also about the qualifications of the management, it is about the qualifications of the staff,
it is about the type of complaints procedure, all of those things which help people to feel
confident that the care they are getting, which ever sector it is in, is of a high quality and
covered in those standards.
  44.  Can I broaden it out to social services funding generally and what I see as the
growing disparity between NHS funding on the one hand, core NHS funding, and the funding
that local authorities are allocating to the social services budget.  Is there any evidence to
suggest that some local authorities may be cutting back social services funding because they
are aware of the money in the health service and they think that the health service will be
picking up the slack that local authorities might be leaving, particularly as they see
intermediate care beds coming on stream there is an opportunity to pull back from some of
the services they are providing.  If that is so, if there  is evidence to suggest that, do we need
to look at more ring-fencing, more protection of the social services budget?
  (Jacqui Smith) No, I do not believe there is evidence to show that.  What I think we need
to do is to promote in a way that the agreement I referred to you before does, in a way that
government legislation has, the sort of joint working, pooled budget, partnership
arrangements between health and social care at a local level that actually means that we get
away from these arguments about is it health money or is it social services money because,
quite frankly, if you are an old person in hospital and you are waiting to get out of hospital
you are not fussed which budget it comes out of, what you are concerned about is that there is
support for you when you get home, there is an intermediate care bed you can go to for
rehabilitation.  It is beginning to the happen but what we need to promote even further is the
pooling of that money, is better joint working, because where we see that we see evidence
that we can address problems like bed blocking, we can make sure people do not end up
going into hospital.  We are seeing some evidence of the flexibilities that are now available
being used.  We have referred to us, and there may be more than this,  61 projects spending 
800 million, not all those for older people, but those are projects where pooled arrangements
between health and social services are improving services for the people that are using them.
  (Mr Milburn) May I add one thing, it is very, very important, in my view, that both the
local NHS and the local social services get out of their ghettos, they have to understand that
they sink or swim depending on the strength of the other. You can see that around the whole
delayed discharge problem.  What you cannot do is provide the optimum levels of emergency
care or shorter waiting times in hospital unless outside the hospital you have a social care
system that is operating more effectively and in cooperation with the local health service. 
Sometimes, sadly, those relationships are not as durable or as strong as they should be.  It is
very, very important on both parts that there is a will to make cooperation happen.  What we
have provided is the means to make cooperation happen.  When we legislated a couple of
years ago we legislated precisely for what local authorities and parts of the health service
wanted, which was the ability to cooperate, pool their budget, introduce lead commissioning
arrangements, and so on. There is some of that but I think we will want to look very, very
carefully about how best we can speed the  further development of the pooling of resources.  I
think you have a point, incidentally, on your first question, which is about the relationship
between social services funding and health service funding, social services funding against
the historic trend is rising quite fast, however there are very big pressures on budgets, not just
for care of the elderly, but care of children, particularly for the most vulnerable members of
the community.  What we have to start looking at is this idea that over here you have an NHS
budget and over here you have a social services budget. We should have, as Jacqui says, one
care system effectively with one care budget.  The way that you get to that is through the
pooled budgets and the partnership arrangements we set out.  So far that has been a matter of
voluntary endeavour and we would prefer for it to remain as a matter of voluntary endeavour. 
We will also look very, very carefully to ensure that patients and users in all parts of the
country are getting the benefit that some are getting in some parts of the country at the

  45.  There is another position, one common organisation.
  (Mr Milburn) There is never a Health Select Committee hearing where that option is not
raised, usually by you, Chairman.

                            Mr Burnham
  46.  The aims of Government are that the targets you have and the aims that you have
might be seen by local councils as not being spent appropriately on social services, that is
something out of your control in many ways.  Is there any way round that?  Is that something
they will have to be accountable for, to look at people, stand up and take decisions and expect
to take the wrap if it is a difficult one.
  (Jacqui Smith) You are right that local authorities will make decisions about their social
services budget but, for example, I think increasingly we will expect to see in the case of
older people, let us say, in the terms of the extra money we allocated through the agreement,
we will expect to see for that additional money results in terms of beds unblocked and
delayed discharges reduced, particularly in those areas where we are focusing the money. 
However, in the end, you are right, local authorities will need to make decisions about their
social services funding but I hope they do that in the light of looking at the sort of needs of
their local communities.  It is quite clear that unless you prioritise and work with health
services in the way that we have suggested and, as Alan has said, positively facilitated you
will not provide the service to your local people they deserve and should have.

                           Dr Naysmith
  47.  This area has been pretty well explored, I just want to say I agree with what the chair
said at the beginning, it is a good thing to be moving away from too much reliance on being
in residential homes and moving towards supporting people in their own homes.
Nevertheless, we still have at the moment some real problems, referred to very loosely as bed
blocking, which covers a lot of different situations, it is really quite important.  You were
talking about local authorities recognising the needs in their areas and responding to them and
funding them properly. There is a lot of evidence, particularly in the South-West of England
and Bristol, where I am Member of Parliament, historically there has been under-funding for
social services and the problems may be worse by the fact that people tend to retire to the
South-West of England, that the disparity between social services funding will grow over the
next few years, and the National Health Service funding is quite great.  How are you really
going to make sure that the needs of the local population are taken into account when it is
done on historical funding, and so on?  It is no good saying, Secretary of State, if they can do
it in one place they can do it in another, that is true of many things but not true of everything,
it is certainly not true of  this.
  (Mr Milburn) There is a means of these two quite big pots of cash coming together.  If
you compare, I know there are real pressures on social services budgets, which is why we
announced last week the extra 300 million.
  48.  Which is very welcome.
  (Mr Milburn) That is very exciting.  That takes the social services average growth up to
around 3.7 per cent.  A few years ago it was rising at an annual rate of 0.1 per cent.  There are
big pressures, really very big pressures, indeed, out there.  We have to look very, very
carefully in the future at how we ensure that the rate of growth for social services, in terms of
its funding, and the rate of growth for the National Health Service is compatible with what we
want to achieve, which is improvements at the interface, the health service and social services
working in cooperation, these problems around delayed discharge being dealt with and for
certain services, and learning disability is a good example of this, where frankly the two
organisations and, indeed, the voluntary independent sector should be throwing in their lot.
For people with learning disabilities they rely as much on the support of the NHS and not just
social care.  What is quite heartening about the partnership arrangements that Jacqui alludes
to, the pooled budgets arrangements, is that very many of them are for people with learning
disabilities, and that is good.  What we have to do is make sure that applies to adults and
particularly to elderly people too.  I note the point. We are very well aware of the pressures.  I
also think it is important that both local social services and the local health service recognise
they have some institutional means to solve some of these problems, we provided that for
them through the partnership arrangements.  Last winter we put money out for the NHS and a
good proportion of it ended up being spent by social services, why, because they were
tackling the same issue. Finally, we have a means actually, if there is the will there on the
ground for the two to really get together through the Care Cross model for social services and
the health services not just to pool their budgets but to pool their management arrangements,
their administration so in the future when it comes to care of the elderly there is one
organisation and not what we sometimes see as two competing organisations vying for how
they provide services to people.

                           Julia Drown
  49.  Can I follow up the chairman's point of view about capacity. There are differing
views round the table about if  we can ever get to the point of no nursing homes. I hope you
would say it is an informed choice that is important for the individuals and their families.  Do
you have a view at the moment about the informed choice of people of home care services
and other things? Do you think there is over capacity or under capacity in terms of nursing or
residential home?  Furthermore, does that mean you then have a policy that if you want
people to have a choice about nursing or residential homes that either means that you need to
plan to have a vacancy factor and does your practice guideline say you should be expecting
there to be a vacancy factor in your home or is part of the policy accepting there are delayed
discharges, and always will be because people have to wait for a space in their home of
choice before they can move to it?
  (Jacqui Smith) No. For example in the care home sector at the moment the occupancy rate
nationally is about 90 per cent, that differs in different parts of the country, that is part of the
challenge of what needs to happen and it is also the reason for the agreement because in
response to your question it will differ. Providing a choice for an older person, which I agree
with you is absolutely fundamental and,  if you like, the mind set that solves this problem is
that you put the older person's needs at the centre of your decision  making then you work out
what part care pathway that older person needs, what choices they want to be able to make,
what range of services they are going to need and then you provide those in the most effective
way, you do not get high bound by whether that is coming from the social services budget or
the health budget.  In order to be able to do that you have to, in terms of commissioning at a
local level, have a much better system than has existed in a lot of areas.  One of the reasons, I
suspect, why it has not happened is the suggestion that Doug made, people have thought the
answer is to safeguard their budget, well it is not, the answer is to plan much better together.
One of the things that we will expect in the agreement that we published, which had buy-in
from the Health Service, from local government and from the independent sector is that at a
local level there ought to be a three year plan that brought together the partners to look at the
type of services that should be available locally, whether or not that is residential or non-
residential services, and compare that with the sort of capacity that there was locally, then to
plan together what they need to do to invest and to change the nature of the services to ensure
that that choice that you talked about is there.
  50.  You expect there to be a vacancy rate, do you have any idea what that should be to
have an informed choice?

  (Jacqui Smith) No, because I think it depends on what your local circumstances are, what
your balance of provision is, what the sort of preferences are that users locally have

                             Mr Burns
  51.  There is the problem that with the closing of residential homes there is no even
pattern throughout the country and one is getting areas of the country where there is a severe
shortage, whereas in other parts of the country there may be a surplus.  Given you are dealing
with elderly people, you cannot move the people to fit the places.  In my own area of Mid-
Essex we are having a problem where it has been decided through assessment the most
suitable place for some people to be is in residential care rather than in a domiciliary care
faculty at home, and they are now finding because there are not enough beds that they are
having to move from the familiarity of an area where they may have lived all their lives,
where their immediate family still are, 30, 40 miles away, which to us may not be very far but
to them the upheaval is tremendous.  Or you have a problem where all the efforts are being
made and the additional money to reduce delay discharge from hospitals is being thrown out
of sync because of this problem.  What can be done realistically, if anything, to try to
overcome this problem, short of just building more homes, which is an option?
  (Jacqui Smith) It is because we recognise the particular problems in Essex, of course, that
Essex have got 2 million out of the announcement.
  52.  All right.
  (Mr Milburn) He is pleased!
  53.  I approve.
  (Mr Milburn) I am glad we have got that on the record.
  54.  Sorry, let me just pick that up.  That is great, I am certainly not complaining and I do
not suppose anyone else is, but how is that going to directly help the problem I have posed to
  (Jacqui Smith) Because one of the things which might happen is that it may be necessary
for Essex Council to sit down with its private nursing home providers and talk with them
about the sort of fee levels which would be necessary to ensure that the supply to provide the
sort of choice you are talking about is there in the future.  It may be what is necessary is to
look at some of the NHS provision which is in Essex in order perhaps to promote more into
the intermediate care services which will enable people not to have to go into long-term care. 
There is not a necessary inevitability that if you break your hip, for example, you end up
having to go into a care home.  It may be that people have tended to think they need to and
there has been a culture around that but, quite often, people do not need to.  But, you are
right, it is not a good thing for people to have to travel 40 miles for there to be the sort of care
they need.  That is precisely why we need that much better commissioning at a local level
than there has been.
  John Austin: Doug Naysmith was talking about the growing disparity between the
increased expenditure  in the NHS and Social Services.  Can I refer you to Table 5.2.1, which
is the outturn and budget compared to an SSA.  I know Darlington is an exception to the rule
  Chairman: It always is!

                             Mr Burns
  55.  And so is Sedgefield as well.
  (Mr Milburn) And of course Mid-Essex with its 2.5 million which you were so grateful
for  just a moment ago.

                           John Austin
  56.  I cannot believe the disparity and the spending above SSA for most of the local
authorities here; the vast majority of local authorities' social services departments spend way
beyond their SSA.  Is this not clearly an indication that there is something wrong in the
calculation of the SSA formula, particularly in relation to social services?
  (Jacqui Smith) It is right that local authorities make decisions about how they are going to
allocate their money, and in relation to that table it is interesting to note that spending well
above your social services' SSA is something which has happened throughout the whole of
the 1990s, and there is no evidence, for example, in the last year that that has gone higher
above the SSA.  But if what you are saying is, do we need to have more money going to
social services departments, then the answer is yes we do, and that is why more is being
invested into social services departments.
  (Mr Milburn) Let me say one other thing.  It is absolutely true, and Jacqui can be the dove
and I can be the hawk on this, there should be more money and we are putting more money
in.  As we look through these tables, there were interesting questions the Committee asked
about the variation in performance between social services departments, not just on outcomes
but on inputs too.  We know from study after study that, for example, residential care
provided by local authorities tends to be more expensive than residential care provided by the
independent sector, and yet, maybe for good reasons but sometimes for bad, local authorities
continue to commission the most expensive form of care, and that is not getting the optimum
result for the taxpayer or indeed for the user.  What we have to do is two or three things here. 
One, we have to get the investment right.  Two, we have to take a long, hard look at how we
get maximum efficiency for the investment we are putting in, including through the best
value regime, and none of us should be frightened of doing that, we should not be frightened
of comparing what the costs are between different authorities and different services.  Thirdly,
as Jacqui has been indicating, we have to stabilise the care home market.  That is very, very
important.  The truth is for 15 or 20 years there has been a market out there which has just
operated as a market, and the National Health Service has assumed it can just get on with its
business and not worry about what is going on.  By and large for a lot of those 15 or 20 years,
people did very well out of it; large profits were made.  That, to be truthful, has not been the
case over the course of the last few years.  In part that is in the South East, Mr Burns' area,
the consequence of economic prosperity.  Property prices have risen quite markedly in many
parts of London and the South East and people have taken a hard look in a market way at
where they can best get a return, and many people have concluded that with local authority
fees rising by 2.9 per cent on average when property prices are rising far faster, the most
sensible thing to do in commonsense terms is to get out of the market.  That causes a problem
for us in some parts of the country.  What I think is so important about what we did last week
is not actually the 300 million, to tell you the truth, it is the fact that we published an
agreement between local authorities, the Government, the National Health Service and the
independent voluntary sector which basically said, "We sink or swim together."  Unless we
can get stability in the market, and in some parts of the country get additional capacity into
the market, then the National Health Service will not be able to do what it needs to do.  There
are two things which flow from that.  One, we have to get all the players around the table in
future when it comes to planning the local care system, and by that I mean the independent
sector as well as the statutory sector.  Secondly, we have to be entering into longer term
agreements between the statutory and independent sector rather than just spot-purchasing
shorter term contracts.  Unless you get longer term stability in the market, people will assume
they cannot get the returns they need.  I agree with you about investment but it is like many
of these public services, the answer is not just putting more and more cash in, we have to
make sure we get a return for the cash.

                            Dr Taylor
  57.  I am delighted, Secretary of State, you have mentioned best value because very
simple arithmetic shows you that the annualised average cost of unblocking a bed is
200,000, and the actual cost of running a general and acute bed is only 110,000 per annum. 
Would it not be more sensible in the short-term at least to keep open a few more acute
hospital beds and thus save some money?
  (Mr Milburn) We can go even further than that, and we are.  For the first time in 20 years
the number of general and acute beds is actually rising.  Actually I think they rose in 1978 by
a few but they are rising now by several hundred and they will continue to rise.  We have a
problem in that in my view for too long in the NHS there has been a philosophy around that
somehow beds in hospitals are bad things, and all of our planning assumptions have been
about reducing and reducing bed numbers and assuming, rather naively sometimes, we can
build up community services and they will cope.  When you have average occupancy rates of
around 89 per cent, as we have now, in our NHS hospitals - compared incidentally to average
occupancy rates of around 55 per cent in private sector hospitals - that causes a problem right
through the system.  It means you cannot get the waiting times down, it means there are too
many delayed discharges, it means that people coming through the front-end, through the
emergency services, do not always get the optimum level of treatment they need in the right
place in the hospital.  So my answer to you, Dr Taylor, is you have to do all these things at
once.  There is not a magic silver bullet you can fire to solve the capacity problems in the
NHS or social care.  What you have to do is build capacity across the piece, in intermediate
care, yes in the residential and nursing home sector, certainly in domiciliary care for people
which we need to see vastly more of, but we also need to take appropriate action to ensure we
get the occupancy rates down in NHS hospitals as well.
  (Jacqui Smith) I am sure you are not suggesting, are you, that it would be good for an
older person to go back to the sort of situation where long-term geriatric beds in acute
hospitals were the solution?  That was neither good for the NHS and, most importantly, it was
not what older people wanted.  It is certainly not what they want to go back to.  We need
more beds, as Alan said, which is why for example the fact we are delivering more
intermediate care beds, some of which are making use of hospital capacity to deliver them, is
a good thing not only for the NHS but, most importantly, for the older people we are trying to
give a better form of treatment to.
  58.  I am quite sure the people of Worcestershire will not see that you are increasing the
number of acute and general beds.
  (Jacqui Smith) Well, we are.
  (Mr Milburn) We have to make sure that happens everywhere, with respect, and not just
in one town in Worcestershire.  We have to make sure it happens across the whole of
Worcestershire and across the whole of England.

  59.  In relation to care trusts, which I find more attractive than some of the models which
have been offered by the Government in relation to collaboration at the local level, is there
any comparative work being done in terms of how that impacts on joint working compared to
areas where we do not have care trusts?  Could I also ask about the issue of joint budgets. 
We have a situation in my constituency - and the Secretary of State knows Wakefield
reasonably well - where in the current financial year the social services departments are
having to make a reduction of around 2 million in their budget.  Under what circumstances
would a health service partner want to come into a pooled budget arrangement with a local
authority which is facing immense pressures?  All of us refer to our own experiences as
constituency MPs but we have a situation  where we have to speak about who is responsible
for the care of people who are terminally ill, who may have six weeks to live.  I have to say
that I find it quite obscene that we are having debates about where the funding should come
for somebody who is dying.  My appeal to you, Secretary of State, and we have debated this
long and hard over many, many years, is that we have to come up with some better answers
than we have at the present time, otherwise we get into that kind of debate which I think is
totally and morally wrong.
  (Mr Milburn) I agree with that.  I think you are right, I think the care trust model provides
an opportunity for that where both the local authority, on the one side, and the NHS locally
through the primary care trust, on the other, could take the decision actively not just to pool
their resources but come together as one organisation.  Personally, I am very keen on that
model.  We have not got care trusts up and running at the moment, they are coming into
being, there are a limited number.  I think we have to test it and make sure it genuinely works
and provides the benefits and outcomes both of us think will probably accrue, but I also think
you have to accompany it by some changes for the individual.  The truth is that structural
change for the individual patient does not mean a damn thing.  What counts for the individual
elderly person or the situation you have described is that in future rather than having the GP,
the health visitor, the social worker and the community nurse all coming out to assess the
needs of a family, we have a single care assessment done by one individual.  I think that is
where we can get to.  We are going to have a single care assessment process in the future, so
we can assess the needs of the individual and their carers and family, and then we can just get
on and fund it, regardless of where the money comes from.  My own view is that in order to
really achieve that, we have to start looking pretty hard at some of the demarcations which
exist amongst some of the staff I have just described.  I travelled recently with a health visitor
on the plane down from Newcastle to London and she was describing to me her frustration
about turning up in a pretty deprived community, doing her assessment of a family in need,
only to find that the social worker had either turned up the day before or was turning up the
day after to do precisely the same assessment.  Why?  Why does that need to happen?  There
is no reason.  One of the more depressing things I find about some aspects of the care system
is that people go along with these things because that is how they have always been done. 
That is what you have to change.
  Chairman: They have not always been done like that, before 1974 it was all different. 
They were all in local authorities, as you well know!

                           Julia Drown
  60.  Can I turn to productivity and efficiency targets, which we have raised at virtually
every inquiry on an annual basis.  The concern we have raised as a Committee has been that
setting efficiency targets year after year, in the words of the Conservatives, has led to cuts
slice by slice in different services which, as you pointed out earlier, penalises the better trusts
more than it does the poorer trusts.  What the figures you have provided to the Committee
show is that actually that is now changing - and politically it sounds dreadful - and
productivity is going down but it is creating what you have said is needed in the Service,
which is some slack in order to deal with the peaks and troughs.  So to be clear about that,
productivity is going down because the money which is going in is greater than the increase
in the actual activity which is got out at the other end.
  (Mr Milburn) I am not sure I would accept that proposition.
  61.  It is there in the figures.  It is partly to do with things like pay awards and so on.
  (Mr Milburn) It depends what you measure really.
  62.  Okay, but those are the figures you provided us with.  About two years ago I think
you told the Committee that you were going to change the policy and set efficiency targets by
trusts, so it is not across the board.  We would be interested to know what the impact has been
of that.  Has that been successful?  But also where does the line get drawn on this that it is not
acceptable to have the same increases in efficiency that we have had in the past, in particular
in the light of  the targets in the NHS Plan?  How do you move policy forward on efficiency
which is sensitive to the needs but delivers the targets you have put out in the NHS Plan?
  (Mr Milburn) I will bring Richard in in a moment, who knows far more about
productivity than I will ever know, but let me just say this.  What we used to measure in the
past, either through the purchaser efficiency index or the cost weighted efficiency index, both
of which you are deeply familiar with, was some things but not everything.  For example,
they do not capture some of the reforms which are beginning to bite now.  For example, we
are seeing I think quite a big shift in many trusts now, in acute trusts, from in-patient work to
out-patient work, things which used to be done in in-patients are now being done in out-
patients.  Within out-patients we are seeing a big shift too from doctors, consultants, who
used to see every patient in an orthopaedic clinic, now towards physiotherapists undertaking
quite separate clinics.  None of that is captured.  What we have a problem with, and this
might be helpful for the Committee to know, is that the pace of change in the service is
running well ahead of the measures we have.  We have to find a better way of capturing
activity than these figures.  Richard shares this concern too.  We have to find a better way of
capturing efficiency and productivity than these figures are capable of doing.  We are
working on that right now.   I would not want you to get the idea that somehow because we
have moved away from the PEI, which was a perverse way of gathering information about
how productive and efficient the National Health Service was, we are discounting all sorts of
things which are good things and not counting them as an activity showing that somehow or
other the Service is getting less productive.  I have a simple test, if you ask most doctors and
most nurses and physiotherapists out there whether or not they think their productivity is
rising or falling, I suspect most of them would say their productivity is pretty high right now. 
That is true, they are working extremely hard, harder than ever.  There is a big through-put of
patients, we have people presenting now with a range of severity of conditions which with an
elderly population we are going to have to get used to in the National Health Service.  There
are some profound doubts about the quality of the data you have in front of you and I have in
front of me when I make some of these decisions.  Richard might want to say a word or two
  (Mr Douglas) If  I can pick up on a couple of those points.  I do not accept, from the
people I talk to in the NHS, that productivity is going down in the NHS.  There are two main
problems we have there, one the Secretary of State has mentioned is the type of activities we
count.  If we shift and change the things we do then we will appear as though we are less
efficient.  If we move to nurse-led clinics and phsysiotherapist-led clinics we will look more
inefficient, which we have to change the data collection for that.  The second point is there is
no quality aspect to these figures at all, all we are doing is measuring a very, very simple unit
cost. If we invest money in drugs to improve survival rates for cancer we will appear less
efficient on this measure and if we invest money in ward budgets, in cleaning for hospitals, in
hospital food we will look as though we are less efficient here.  These are all the sort of things
we are trying to do for government and patient safety agenda, but none of that is delivering
activity but it is delivering improvement in the overall quality of care and overall patient
environment.  We have to change two things, we have to pick up activity better and we have
to identify the extent to which we are investing quality here as well as just increasing
throughput. On your first point around how we are  revising targets to reflect this, what we
tried to move towards this year is not to target trusts on the basis of who is the cheapest in all
this.  In setting efficiency targets what we set is who are the most efficient trusts within the
top performing overall.  We have looked at the overall performance indicators and said within
the top 25 per cent of those we have to look at who appears to be the most efficient using
reference costs work we have done and then say we will set those as the benchmark, so they
are both lower costs and achieving quality and other targets.  That is the way we tried to set
the efficiency targets for this year.  We still need to progress that further.  There is still work
to do but we are moving that way.

                            Mr Taylor
  63.  I am sure, Secretary of State, you share the concerns about the Whipps Cross Inquiry,
this recently highlighted one of grossest of inefficiencies of the NHS, that is the use of agency
nurses, quoting from it,  "An average of 13.75 whole time equivalent agency nurses every
week in August.  Four to five agency nurses per shift, many of whom were not actually A&E
trained".  If you look back even at some of the scandals I reported in Worcestershire those
occurred when agency nurses have been on.  If you look back at the costs in 1995 to 1996
130 million went on agency nurses and in 1999 to 2000  360 million went on the cost of
agency nurses.  How do you plan to reduce that when you recognise that an agency nurse has
fixed hours, much less responsibility for a ward and higher pay?
  (Mr Milburn) There is a very simple thing that we need to achieve, 1) we need to set that
as our objective, which we have. It is perfectly clear in terms of continuity of care and quality
of care that it is far more preferable to have a lower reliance on agency nurses than the NHS
has right now and 2) to change the mind set.  When I discuss this, particularly with colleagues
in London, where there is a higher rate of agency workers than anywhere else in the country,
even in Worcestershire, I find it slightly bizarre because what the trusts say to me are,
"basically the agencies have us over a barrel".  Wrong, the National Health Service has the
agencies over a barrel, for the very simple reason, the National Health Service is the
purchaser, we have the money. What we have to get is St Thomas' and Guys working
collaboratively with trusts in Jim's area and trusts in other parts of the country so that they
come together and use their purchasing muscle to get the right sort of deal in the first place. 
The second thing we have to do is look at why it is so attractive for nurses to go with an
agency.  Part of the reason, frankly, is around pay and part of the reason is around flexibility
of working hours.  As you are probably aware, one of the things we recently introduced as a
new part of the NHS is called NHS Professionals, which is, if you like, the National Health
Service running its own nursing agency.  It is phenomenally successful.  In some parts of the
country we are getting huge sign up from nurses, paying decent rates but looking after their
career prospects too. The one thing the agencies cannot do is give the nurses continuing
professional development, they cannot make sure that childcare is there for them when they
need it.  We can do that in the NHS.  The starting point has to be for local NHS employers to
have some courage and come together to collaborate as NHS professionals with means of
doing so to ensure that.  Of course there will always be a reliance, as we have, within
individual NHS trusts on bank nurses, there will always be that, whether or not there is a
shortage of nurses for a whole variety of reasons, through sickness, family reasons, and so on. 
We have to have some sort of safety net that is outside the normal continuity arrangements.  I
profoundly think based on the early work that NHS Professionals have been able to take we
can be pretty successful here.  Providing, this goes back to what I said earlier, we can
recognise in  the labour market where there are shortages the person selling their labour is in
poll position rather than the person buying their labour, in this case the National Health
Service. Providing we recognise that we can make some changes.  That means that the NHS
has to get much cuter at how it employs people. It means child care arrangements, it means
annualised hours so that nurses can begin to choose when it is most convenient and
appropriate for them to work rather than being set a set shift.  What I find, as I travel around
London particularly, is that when I go to neighbouring trusts, I went to a trust in Lewisham,
as Mr Dowd will remember, and one of the things that really struck me there is that certainly
the morale of the ward sisters that I spoke to was pretty good. It was good for one reason, it
was good because they really had a trust that bothered about them, that took their interests
into account.  As far as both the male and female ward sisters were concerned it provided
really quite outstanding child care facilities.  If that can happen - I know it is a simple
proposition that Dr Naysmith talked about -  in Lewisham what we have to do is learn the
lessons from that.  Back to the point that Sandra made earlier, what we have to do is have the
means of spreading that sort of good practice around the system. It is basic, simple  and good
employment practice.
  64.  I do hope you can do that extremely quickly because at the moment the agencies do
have nurse managers over a barrel, faced with an emergency situation.  Many hospitals have
banks which work really well but they still need agencies to top it up.  If you can force
through a much wider arrangement with bank nurses that would be excellent.
  (Mr Milburn) I can send you details round NHS Professionals and how successful they
are.  I am very happy for people to see that, it is a very, very interesting example of how the
NHS gets it act together and is prepared to have some courage and it can get on and make
some profound changes in the interests of not just patients but staff.

                           Dr Naysmith
  65.  It is interesting a few moments ago, Secretary of State, we were discussing efficiency
and productivity in the National Health Service and depending on what you measure you can
get different results up or down.  That brings us to a point we want to talk about, key targets
for trusts, and so on.  You know that clearly there it depends on what you measure whether
you get a good result or a bad result.  Before we start, you dropped the idea of using a traffic
light indicator system in favour of the staring system, can you explain what the difference is
between a traffic  light system and the staring, apart from the fact that one has three levels
and one has four?
  (Mr Milburn) There is not a material difference.  We listened to what the NHS had to say
to us, I think the NHS Confederation made quite strong representations to us, they felt that
the traffic light system was more pejorative than the staring system so we went with that. 
Materially there is not a huge difference, presentationally there is.
  66.  Okay.  Do you think a patient would be justified in refusing to be treated in a hospital
which has received no stars at all?
  (Mr Milburn) I do not.  I think it is very important, not withstanding Mr Amess's concerns
about this, it is very important to take some perspective and get some proportionality into this
debate round star ratings. As I said at the time we did the star ratings we accepted that the
data we used in the system was far from perfect, it is the first time we have done it.  In a no
star trust or in a one star trust there can be perfectly good, and sometimes outstanding
facilities, in certain parts of the hospital or the organisation.  It is not that people are not
working very hard and the staff are not doing a good job, they are, but what the star ratings
show is that there are real problems which are not about how hard the staff are working but
which are about levels of performance management and organisation.  You know it and I
know it that when you go around the National Health Service, or if you go around any large
organisation, what makes or breaks the organisation is the capacity of the organisation and
the capability of the management.  It is about time we recognised that.  The reason I have
done that, and incidentally I will continue to do it and do even more of it, is because we have
started with the hospitals, next year we will go on to extend that to community health trusts
and to primary care trusts, so the Chairman should feel absolutely assured that the PCTs are
going to be as actively monitored in as visible a way as any acute hospital is as from spring
next year.  What we have never done in the National Health Service under successive
governments is a very simple thing, and that is to recognise there are differences in
performance.  Of course, how you measure makes a material difference and of course
hospitals and PCTs are complex organisations, but there are some pretty basic things which
patients want to know about their level of care.  They want to know their hospital is clean,
that the waiting lists are not all that long, that if you have cancer you will be seen relatively
quickly.  These are pretty basic things.  We have measured that for the first time and provided
that information to the NHS for the first time.  I said this at the time we launched it but just
for completeness, two months before we drew up the star ratings, before I had any
information available to me, I made a secret list and tried to guess which hospitals would
come at the bottom.  I got ten right out of twelve.  Why did I get ten right out of twelve? 
Because each and every week Epsom and the St Helier Trust, the Brighton Trust, the JR in
Oxford and others - where people are working really hard but there are some profound
management and organisational problems - have come across my desk.  I just do not think it
is fair that in the end I know that information, the people in the service know that information
and the BBC know that information because they went to film at the JR even before they
knew what the results of the star ratings were, the only people who did not know hitherto
were the public.  The National Health Service is a public service, it belongs to the public.
  67.  I accept that but some of the information you talk about was made public.  I hate to
mention the community health trusts but some of that information was available and in
summary was made available to the patients.
  (Mr Milburn) Let me deal with that point because it has never ever been made available in
this sort of way.
  68.  I agree with that.
  (Mr Milburn) We have never learnt to look across the piece at what a hospital does on its
main basic indicators.  That information might have been available in some parts of the
country, it might have been available in some parts of the NHS, but it certainly has not been
made available to the public.  The starting point, to get back to Sandra Gidley's point, is if we
are going to get more choice into the system, which I profoundly think we need to do, you
have to have decent information so the patient and the GP can make the appropriate
  69.  I am 100 per cent behind that and am in favour of information but this is rather
limited information in a number of areas, which you yourself admitted a few minutes ago. 
What real use is it to the patients at the moment?
  (Mr Milburn) From the patients' point of view, it will provide them with certain
information  about standards in the local hospital and in neighbouring hospitals, and they can
always exercise the right with their GP to demand they go elsewhere if that is what they want
to do.  But I think the more important thing which the star ratings actually do is empower
change within the National Health Service.  In parts of America for very many years, in parts
of New York State for example, a patient needing a heart operation has been able to go into
the local library and look at which heart surgeons get best outcomes.  If you are going to have
a heart operation, probably that is something you want to think about, as you know.  By and
large what has happened in terms of changes in behaviour in America, and I suspect here too,
is that patients have not actually exercised a huge degree of choice based on that information. 
Where behavioural change has come is in the organisations which came down the league
table rather than at the top.  It is one of the very important things to recognise about public
services, people are really motivated to be better.  People do not come into the NHS, whether
managers or clinicians, or cleaners or porters for that matter, to make a mint, they come in to
improve care.  That is what they are really motivated by.  It is important that they are faced
with some of the lapses in quality and some of the problems which exist in their
organisations.  My sense is that what will happen in those organisations which have not done
well this time round is that there will be real effort to get better for next time round, and that
will make a big difference to the patient.
  70.  There is a lot of data behind the summary tables produced and published, do you
intend to make that data public?
  (Mr Milburn) I think we have put it on the website.
  (Mr McKay) Much of it is available on the website.
  (Mr Milburn) At the time we published the summary data we put it on the Department of
Health's website, so there is quite a lot of background information.  If it is helpful, there is no
problem about you having that information if you would find it helpful.
  Chairman: Right.

                        Siobhain McDonagh
  71.  Most of the elderly and very vulnerable of my constituents go to St Helier Hospital. 
What they have felt about the new star ratings is that at last somebody had listened and
acknowledged the problems.  What I felt as the local MP is that somebody had finally
acknowledged the problems because how ever often we went to the hospital, how ever often
we said to the chief executive, "This hospital is dirty", you could never get it through; nobody
listened.  I hold the reverse of your feeling about it because for my constituents somebody
knows and somebody cares and somebody is saying that the experiences they have had are
right and they do exist.  Nobody up to date is refusing to go there but what they hope is that
this will be the beginning of real improvement.  Up until that point they felt they were being
ignored and nothing was ever going to get better there.  You experience a lot more humility at
that hospital than you certainly used to.  For St Helier the problem was two-fold.  We got a no
star rating and then we had the CHI report which really slammed it and that, in its own way,
is actually more useful in terms of detailed work.  I know you have amended the star ratings
because of CHI reports, does that mean you have more confidence in the CHI reports and
how are you going to link the two together?
  (Mr Milburn) Just to deal with your first point, let me acknowledge from the outset that
this has been a pretty painful process to have to go through.  It must have been pretty painful
for the people working in Epsom and St Helier but it is the right thing to do.  Unless we get
through the pain barrier, we will not get improvements.  I think you are right, and I think it is
true too for staff.  People have said to me, as Mr Amess did, by publishing information which
showed some hospitals were doing less well than others, it would have a detrimental effect on
staff morale.  I think what has the most detrimental effect on staff morale is for staff to feel
that nobody is dealing with the problems they have to deal with day in, day out.  Why should
people have to work hard inside a system which cries out for change and improvements in
organisation and sometimes in management too?  I think it is the right thing to do and I think
that what you will see as a consequence of the star ratings is improvements rather than a
deterioration in service.  Secondly, it is very important that we break the log-jam in the NHS. 
We have to stop treating the NHS as if it was purely a monolith because as we all know, and
you recognise yourself, services differ and there is variation in performance, and what we
have to get is the incentive regime in the National Health Service differentiated too.  If people
are doing well, in most organisations they would get a reward.  If people are doing badly,
something will happen as a consequence.  In the NHS it has been the other way round until
now.  From my point of view, sitting at the top of this huge organisation, I take a great deal of
comfort from the fact that if there are three star organisations doing well I do not have to
worry so much about them.  But if there are no star organisations and one star organisations
which are doing less well, I do have to worry about them and they need extra help, extra
support, sometimes some changes in organisation to get better.  The organisations which did
well should have more freedom and should be able to do a simple thing, if the good are good
we should give them the freedom to get better.  That should be as true, in my view, for
schools as it is for hospitals.  That is where we need to get to.  On the third point you make
about the relationship with the Commission for Health Improvement, I want to get to a
position where over time, and I hope we can begin this next year, what we give in terms of
measurements and what the Commission for Health Improvement does in terms of
measurements gel together, so we have one set of reporting in the National Health Service.  I
know people are concerned about the performance management arrangements, the inspections
which are taking place, and we need to rationalise that, so we are producing one set of
performance information based on what CHI do and based on our performance management
assessment rather than two disparate sets of information.  The other thing we need to do is to
make sure we get in as much focus on clinical outcomes as possible in the future.  That is a
raw and tentative science but we need to get better at it.  As I have said to the Chairman in
previous hearings, my view about this sort of thing is that we will only get better in terms of
publication of clinical outcomes once we start having the guts to publish clinical outcomes. 
The science will lag behind the publication.  I think we have made a start with that, we need
to do more next year and the years that follow on to give a better and more rounded picture of
how our NHS is doing.
  Chairman: I know you needed to be away by 6 o' clock I have two colleagues who want
to ask very brief questions

                            Mr Taylor
  72.  One of the concerns about the non-clinical indicators is put into a very few words in
the Whipps Cross Inquiry, "The imperative to avoid a 12 hour wait for a bed  is an overriding
driver behind bed management to the detriment of good clinical care".
  (Mr Milburn) We have to make sure that people are not waiting too long for a bed.  I hope
that every clinician, every politician and every member of the public share that view.
  73.  What this is getting at, Secretary of State, is that people who have been waiting
eleven and a half hours are seen, perhaps, before people who have been waiting a shorter time
who may be more urgent?
  (Mr Milburn) I would much prefer if people did not wait eleven and a half hours.  As you
know in the NHS plan we have targets to get the waiting times down.  People should not be
waiting 12 hours on a trolley, people used to wait for 24 hours and 36 hours, so that is 
moving in the right direction.  The only way you can do this, with respect, is you that you
cannot move from a position where some people are waiting 24 hours on a trolley and get
back down in one swoop to four hours. We do have a stage process here and it is important
that we get rid of 12 hour waits and then in time we get rid of 10 and eight, and so on, so that
people are not waiting too long.
  Chairman: What I think may be the final question.

                             Mr Amess
  74.  I am going to write to you on the hotel star rating because I cannot speak publicly
about why morale is so low but it is obvious that we have staff working at other hospitals
who have been rated differently.  It simply is not the case that we rate one star, I do not want
to talk about it publicly. Last year the Audit Commission carried out an investigation into
disability equipment.  Their report, this is about audiology services, "Nowhere is the cost
versus quality debating public services provision better exemplified than in the provision of
hearing aids.  Millions of people could benefit from reduced waiting times and the provision
of more modern hearing aids".  On the basis of such strong support for increased investment
in  audiology services why can the Government not make a decision to roll out digital 
hearing aids throughout the whole of the National Health Service and ensure that millions of
hard of hearing people could hear better, particularly this wonderful story that the
Government has to tell us about the management of our National Health Service?
  (Jacqui Smith) Because I think it is right that we evaluate the 20 pilot trusts that we have
already put in place, which have been operating, I think, less than a year. That we ensure that
we have not just in place the capital necessary in order to deliver digital hearing aids but we
also consider some of the issues around the staff that are going to be necessary, around the
sort of processes that we want in order to make sure that our audiology services in general are
effective.  That is the reason why we set up the pilots.  We need to look very carefully at
those in order to determine what the best way is to develop the services. We set up those
pilots because we recognise some of the arguments.  It is right that we consider the
implications and what will be necessary if we were to be able to go further than we have
  Mr Amess: You are going to wait and see.

                             Jim Dowd
  75.  To round off the star rating system, Lewisham, as you know, managed to get two
stars and their ambition is to achieve a third one quite simply and they are keen to do that. 
Sometimes when you set systems on performance criteria what you develop is an expertise in
meeting the measurements rather than improving the performance.  There is no mention, for
example, of delayed discharges, even though I fully understand it is not wholly within the
individual institutions' competence to deal with that.  Are you satisfied that this is broad
enough?  Will you be refining the criteria in time?
  (Mr Milburn) Absolutely.  We were pretty candid about this at the time and I think I said
in the press release that this was far from perfect, which is unusual for any Government press
release to acknowledge.  I thought it wiser to do that really.  It will be refined and it will get
better.  Last week I was in Washington, as you know, and while I was there, apart from
dealing with some of the obvious issues, I was at an international conference on quality of
care and how we make improvements, how we manage what information we get out, what the
combination of incentives and inspection is that you need across the world.  The
representatives and health ministers were from America, Canada, Mexico, New Zealand,
Australia and elsewhere, and one of the striking things I found is that amazingly enough they
are looking to us and what we are doing because we are at the leading edge of this
internationally in terms of how you measure performance and how you use the measurement
of performance to lead improvements in performance.  We need to get better at it, we need to
integrate the Commission for Health Improvement, but I think the star ratings we have
produced thus far are a prime step in the right direction and mark quite a decisive break from
the past where we have not differentiated performance in a way which is clear enough, either
to people working in the service or most importantly for the people who use it.
  Chairman: Secretary of State, I thank you and your colleagues for your attendance today. 
We look forward to seeing you again this time next week.