Select Committee on Health Minutes of Evidence

Examination of Witnesses (Questions 160 - 179)



  160. This is not what I am asking. What I am asking is specifically we have been informed that the reason for the drop in numbers over the sequence is directly as a result of bed reviews that took place that had nothing to do with any form of capital financing but as a result of the changes in medicine, of day surgery and an increase in bed throughput. Are you saying that is wrong?
  (Mr Moss) I think it is a very, very complicated question. We think that PFI and the costs associated with PFI have a major role, along with capital charging, in determining the number of beds that could be built. There are a number of very highly suspect assumptions made about the way in which the bed plans or the bed model was constructed. In 1996-97 in the full business case the assumption was made, contrary to what had been in the outline business case, that in the year 2000 the number of inpatient admissions would be the same as in 1996-97. That is a rather surprising assumption, given that the outline business case had assumed that there would be a nine per cent increase by the year 2000 was reached. The implication of that is that the number of beds in the hospital was tailored to the financial equation, not to health needs

Julia Drown

  161. Are you saying it would have made the public sector comparator cheaper?
  (Mr Price) The analysis is that the annual cost of debt finance arrangements, and PFI is just debt finance, depends on the value of the assets that you are getting, that obviously follows. I think what Mr Mason and Mr Flook were suggesting was basically two things, that PFI did not increase the asset value, there was not a separate PFI effect that made the asset more expensive and Mr Flook also said that any new hospital was going to be more expensive than the hospital that it replaced. I think both those points are questionable. The point that Mr Flook made, that any new hospital is more expensive is very difficult to understand because the capital charges on the existing Dryburn are paid at replacement cost. It is not obvious that the replacement hospital should have a higher asset value. The problem with arguing that the PFI has no separate effect, which was Mr Mason's point, is that we can see that there are separate charges that arise simply from PFI. There are two ways you can see this, you can see that the PFI affected the total capital cost. The total capital cost for Dryburn was around £86 million, £18.2 million of that was financing costs, that is 21 per cent. Financing costs do not occur in public sector procurement. I heard it suggested that they do and I have heard it suggested that they should but there is no cash cost in public sector procurement that is equivalent to that £18.2 million. Your total capital cost is therefore inflated by this distinct PFI effect and it is very difficult to see how you can then argue that the public sector option is going to be the same costs. The second way that the PFI increases the cost is that if you have a total capital cost that has to be repaid over the life of the contract, over the 30 years. That is repaid in the annual fee and the availability fee. If you translate the total capital cost into an availability fee then two other PFI effects kick in, one is the higher cost of borrowing, because the borrowed sum has to be replaced and we know PFI has a higher costs of borrowing and we know too there is an equity share of minimum 10 per cent in the total capital cost. I do not know what the rate of return was on the Dryburn, I understand it was 18.5 per cent, and the cost of borrowing is 6.5 per cent—these figures are subject to confirmation—these show these are distinct PFI effects, one on total capital costs and the other on the annual costs of repayment. We can say then that PFI of itself, apart from the debt finance model, which obviously has an effect if it increases the value of an asset, has a revenues pressure and that will be expressed through bed modelling.

  162. Is that all put into the model when they are checking it against the public sector comparator?
  (Mr Price) When you get to the public sector you are starting to talk about value-for-money. When we are talking about bed numbers we are talking about affordability, not value-for-money. Value-for-money is not about cash, it is not about affordability. The PFI factor on beds is about the cash in the system, where the money goes. If it is going to pay for the increased cost of PFI, which means something like 16 per cent of your income has to pay for capital, where it is normally only eight per cent that has to pay for capital, then that money must come from another part of the budget. I do not understand what Mr Flook is saying that they were funded for that affordability gap. According to the full business case no extra revenue, apart from the smoothing mechanism, was coming in. It is an interesting point he makes and since I do not have data after the full business case it would be interesting to see it. The PFI model does not presuppose extra revenue support.

Andy Burnham

  163. I would like to turn to our colleagues in the RCN and just ask about the design and construction of the hospital. Before we came here we all read stories about the litany of problems in the hospital, during the early days it was too unbearably hot, ambulances not being able to turn around, no hot water and all of these things. Certainly one of the things I have taken away this afternoon, talking to possibly your members on the wards this afternoon, is that they were over blown, all those stories, people wanted, for whatever reason, to cite it as a failure. Is that fair or do you think some of the technical problems, and clearly there were technical problems, are they more deep seated or are they just the small things you get in any hospital? Are the staff happy with the working conditions they have?
  (Mrs Lemmon) The things happened. The heat was intolerable in the middle of the summer. Problems did occur which I think should have been preempted, they should have been seen before they happened. However things seem to have settled down. On the whole I think most people are reasonably happy in general with the way that the hospital is set out and the technical specifications of it. There are problems. There are still specific problems which should have been addressed before the hospital opened. Things like doors which are not electronically operate, so if you are taking a patient to and from theatre you are actually having to hold doors open. You will see a lot of them, I do not know if you noticed, a lot of the doors which are marked fire doors are kept open. The reason for that is because they do not stay open and if you pass through with a wheelchair or a trolley the patient's arm or limbs can get knocked.

  164. The Chief Executive referred to a feedback groups or focus groups in terms of the experience of staff, are they working? Do you feel there is an opportunity to say where you want to see improvements, that these doors need to be made automatic?
  (Mrs Lemmon) There has been the opportunity, we have had meetings where we have been able to come and talk to members of the executive board and express our concerns. How quickly those problems have been resolved gives me some concern. We still have seen no movement on the problem with the doors. The heating situation, I hope, will be resolved next year when we can open windows when the demolition work is over.

  165. From what you are saying, am I right to infer, the failures, the technical problems and the teething problems in the hospital they were not because it was PFI financed hospital, they were the kind of things you would get when you transfer services from one site to another and in fact the quality of service is actually quite good.
  (Mrs Lemmon) I take that with a pinch of salt, I think. Aspects of how the hospital has been set up give me cause for concern. I think in general the staff feel that possibly their needs were put towards the bottom of the pile when it came to designing the wards, et cetera. Our changing facilities are abysmal, absolutely abysmal. The toilet facilities, one toilet, unisex toilet, per 33 bed ward for staff use I do not think is acceptable. We have sitting rooms which we did not have before and we have staff rest rooms which we did not have before but we have a whole floor where we have four 33 bed wards and all of the female staff—and bear in mind we are talking female to male ratios are something like 90 per cent to 10 per cent—are getting changed in a room possibly quarter the size of this room, which I do not think is acceptable. Things like that should have been addressed. Whether it is to do with PFI or to do with bad building design in the first place I really do not know. I feel that emphasis has been put on the public phase, if you like, and not enough emphasise has been put on giving staff facilities.

  166. That does not quite tally with what we heard from colleagues on the ward. The three people I spoke to they were pleasantly surprised and were happy with their work environment.
  (Mrs Lemmon) When you are talking comparisons, where we have worked for the last however many years, compared to that it is a world of difference, a world of difference. There are aspects I think that more concern should have been taken towards looking after the staff. It is fabulous to have a rest room, we never had a rest room for staff. It is nice working facilities, it is airy, it is light but there are things which I think should have been addressed. We are supposed to be working in patient focussed care and all your services are supposed to be ward centred so you do not have to leave the ward any more than is necessary. Systems were put in place, such as the pneumatic tube system, which is a pneumatic tube feed. I do not know if anybody experienced that system working through the night, the noise is unbelievable because it goes up in to the roof, shoots along the roof. Any patient in a side room need forget about sleeping because the racket is unbelievable. The pneumatic tube system is not working terribly well because if you put a blood sample in it it is haemolysed by the time it gets to the lab. Urine samples explode in it. We have now been told if we take a blood sample from a patient let it sit for an hour before we send it to the lab, that rather defeats the object of immediate care. Things like the buzzer system, which is fine, every patient has a buzzer, a call system set up to attract the nurse's attention and a light system to indicate where help is needed. However, although on the control panel it says there is a mute facility on it for through the night there is not a mute facility that works through the night. Through the night if you are on a ward, as I am, with orthopaedic patients who are bed bound and who need to buzz for help through the night the noise goes on continuously all night. If one person gets woken up, the next person is awake and also buzzes and it is a continuous system. The opportunities for rest for the patients is somewhat limited. The call system, I think, could do with a bit of adjustment.

  167. If there was a patient survey what would that be showing now in terms of satisfaction with the quality of things?
  (Mrs Lemmon) I think on the whole patients are reasonably happy with what they have. They came in, however, because of the bad publicity with a different idea. As the nurses on the wards we had a problem initially because of the adverse publicity for the hospital and people came into the building expecting problems. We had to reassure them they would not have to pay for vases, they would not have to pay £30 for a porter to take them to the theatre. All of these rumours came long. You could hear patients coming along the corridor going, "I do not like this. You can see where they spent the money. That is not up to scratch", and they were expecting a bad experience. It is not just on the ward, as nurses on the ward we had an uphill struggle to assure them and to make sure that their experience was not a bad experience. That is something that we are overcoming now, I think. We have been working for a while and patients more often are going home with a good experience. I think it is down to the staff on the ground that make the hospital works. We have overcome the difficulties, we expected snags and problems, it is a new building, we could not expect anything else, but there are aspects of it which should have had a little bit more careful consideration and a bit more input from the staff on the ground.


  168. I was going to ask you, what involvement did you have? A criticism that has been of some of the new schemes has persuaded the government to ask Prince Charles to come along to assist and one or two of us felt that people like you might not want that, what involvement did you and your colleagues in UNISON and GMB have, people working on the design stage of the practical issues of the kind you talked about.
  (Mrs Lemmon) We were allowed to see initially the two last designs that were put forward as potentials for the new hospital. I do not think at that stage I can remember being asked our opinions on which one we preferred. In the end I got the impression the design that looked good got picked.

  169. Are we talking about big models?
  (Mrs Lemmon) Yes. We got a look at the big picture and we were told how it would work, the triangular wards, et cetera. Once the design had been picked we were informed how it would work on the triangular ward system. Patient focus care, I am not sure if that came first or after. I do not know if that was planned because of the hospital or that was planned and the hospital took it on board. As to the day-to-day running of things I know that some of the sisters, some of the ward managers were asked for input. I do know that certainly some of their input was not taken up. I know that some of the ward managers asked for the wards to be a bit smaller than 33 beds, but obviously that was never on the cards because it was designed specifically that way. Little nitty gritty things, I have had a sister who came down from Shortley Bridge to open up the new plastics unit and she did not have a linen cupboard. Obviously the input for the day-to-day running of things was not as much as I feel it could have been.

  170. Do our colleagues from UNISON have anything to add?
  (Mr Weeks) Obviously in any transition everyone accepts there will be teething trouble and problems arising from building. The proponents of PFI, forgetting that one of the main arguments of PFI is it would produce a step-change upwards in design and although there would be some transitional problems you would not get the type of problems you traditionally have within NHS design. When making an overall assessment of whether it is the move to a new building or impact of PFI or design that should be borne in mind in the general assessment. We were promised by the advocates of this approach by integrating design and delivery this would change the traditional experience in the NHS.
  (Mr Moss) Very quickly, the question was asked, was there a PFI effect in terms of design? Very definitely at one stage there was. During the famed affordability crisis, when the whole project went dead for many months, the outcome of the affordability crisis was that instead of having 50 per cent single beds you ended up with a figure of 25 per cent, I stand to be corrected on the figure.

  171. Single rooms you mean, not single beds!
  (Mr Moss) Single bedded rooms and one of the triangular units went west. Unfortunately all the PFI projects I have seen all seem to have sewage coming up, this hospital was no exception. Of course there are teething problems. The design faults are a mixture I think of cost cutting, corner cutting and sheer bad design, and you could pick out things. Cost cutting, the lack of changing rooms, one changing room for three wards; three nurses to share one locker; the fact there are no linen cupboards, the fact that soiled linen has to be dragged through clean areas to be put into soiled linen cupboards; what about the lack of air conditioning. You will go to the Carlisle and you will hear the same story there, people baking in the hospitals. It is a state of the art hospital why does it not have air conditioning. You have fire doors, the doors that were being referred to by my colleague earlier on, why do we not have doors that automatically open instead of going through the rigmarole the nurses and porters and other staff have in terms of when they are wheeling patients on trolleys and chairs. These things are not just pure design faults, I think they are evidence of cost cutting.

Dr Naysmith

  172. I was going to ask a question or two about the reduction in bed numbers that obviously took place over that 10 years. We have probably dealt with that for the moment, though I am sure we will take it up else where. The Royal College of Nursing in its evidence suggested that because there had been a reduction in bed numbers there was higher throughput levels, do you think that is related to the fact that there is a smaller number of beds in the hospital.
  (Mrs Lemmon) It has to be related to that. We have got use to the idea of the quicker, sicker patient, it is not anything specifically to do with PFI it is do with getting to grips with waiting list numbers, you know getting people through the door and out the door again. The pressures on ward staff have increased substantially in recent years because of that. As was said when I came into the meeting earlier about the actuality of patients going home so much quicker means that you have a lot more pressure when you are working on the wards.

  173. Some people would argue that standards have changed and it is better nowadays to get some patients home earlier rather than spending 10 days in hospital, but you do not buy that?
  (Mrs Lemmon) Possibly. In some situations I can see that patients probably are better at home, however the downside of it is that you have staff who are now working at extreme levels of pressure, who never get any respite, who never have the opportunity to have a patient who needs minimal care, if you like.

  174. What you are really saying is you think it would be a good idea to keep people in hospital not making demands on the hospital?
  (Mrs Lemmon) I am not saying that. It has to be recognised that the pressures on staff and the workload has shot up.

  175. I am sure that is right. Nurse nowadays work extremely hard and I understand that.
  (Mrs Lemmon) Going back to what I was saying before, if do not look after your staff, if you do not give the staff the impression that they are being cared for and they are a high priority in the situation we are in then staff will not continue to work in that situation.

  176. Are you suggesting there has been a decrease in the quality of care?
  (Mrs Lemmon) I do not think there has been a decrease in the quality of care. What you have got are the people who remain, the people who say in the acute nursing service are the people who are very dedicated, very skilled and who can offer you the most. The people who come out of the situation are those who cannot cope with the pressures and who feels their skills would be best applied else where. The ones who are left are the people who can give you absolute, top return for your money, if you like.
  (Mrs Bottrill) I want to come in on this issue about bed reductions and PFI. I think it is very difficult to link bed reductions totally to PFI. We have actually given evidence that in the smaller PFI schemes, where there was an opportunity for community services to develop alongside the scheme, you have a working situation. It is when you have the larger schemes, with the corresponding bed reduction numbers and you have not got the back up system outside the acute hospitals. I have worked for 24 years in an acute hospital, I understand about changing patient services, doing things faster, doing it in a day instead of a week, I have been part of it. In fact we now do have the patients in the larger hospitals who are highly dependent and there is nowhere else to put them. You therefore get the inappropriate boarding out of medical patients in the middle of an orthopaedic ward or a surgical patient in a gynaecology ward, it is going on all over the place, that is unacceptable to a professional nurse to try and have that case mix shift after shift after shift. It is rather like asking an accountant to go and do a bit of admin work in the personnel department, they will be able to do some minimum things, they will not be able to carry out the task appropriately because it is not their chosen speciality. That is where the quicker throughput will have a demoralising effect on the nurses.

  177. I know nationally the recruitment and retention of nurses is severe, how severe is it within this area?
  (Mrs Lemmon) I can only give you instances of our actual experience. If we advertise in the Trust for a D grade staff nurse to work in the acute sector we are lucky if we get one or two applicants. If you advertise for a team assistant you will get upward of 50 applicants. I think that indicates there is a lack of qualified staff available. In order to get people into the job you have to give them decent working facilities. It is bad enough having the pressures of the actual job but if you then do not support with ancillary support, decent changing facilities, whatever, then nurses will look elsewhere. That happens. I have had colleagues who have spoken to me and said, "I thought about coming to work in your hospital but I have better facilities up the road, I will go there". They have open choice.


  178. Going back to the original beds issue and the wider arrangements for social services care or whatever. Mrs Bottrill, you implied that smaller schemes could be what we term whole districting, I have quite a large scheme in my area and we have initial approvement by the government, and that is a whole district scheme that is looking at primary care, intermediary care, you seem to imply that this could only happen with a smaller scheme, why could it not happen with larger schemes
  (Mrs Bottrill) I think if there is a smaller scheme—and our evidence is based particularly on mental health patients—if you look at the scheme, at the build, at the service and look at the service delivery and everything that needs to be in place then you have a greater chance, in our experience, of delivering on that. As it escalates up to a larger scheme some things just seem to fall off people's thinking and I think that is where we now have fragmented services and you have not got the appropriate number of intermediate care beds to pick up the patients who are having major operations in this hospital today. If you started looking at processes and then build the process round the patient you might have had a better chance of matching the two. You have a design ethos here but the functionality went out the window when people started to design the building. I think it is an issue that people have also tried to rationalise services in this area as well and that has confused the clinical staff as to exactly what is the fault of a functional building and what is the rationalisation of services.

  179. Mr Price, from your study do you want comment on that general point? Have you looked at various schemes?
  (Mr Price) If I can make two comments, one is that there is that affordability problem again. In looking at the acute sector PFI one of the routes that has been very frequently taken with PFI is bringing in money from other parts of the health care system to bail the acute sector PFI out. One of the places where it comes from is community sector investment. You have this paradox of a new hospital, a smaller hospital dependent on greater post acute or sub acute care and you have a withdrawal investment from the sub acute sector. That is a paradox. I do not know whether this happened in Dryburn but plain community investment had not taken place. The bed blocking here suggests that the community schemes was not in place with the acute scheme. The other point I would make very briefly is there is a hypothesis that underlines all this, there has been a steady unrelenting and constant increase in the efficiencies of inpatient management, that is to say a higher occupancy rate, higher throughout rates and shorter length of stay. The problem with that assumption is the efficiency gain is meant to have made room for PFI, your health care spending would go further if you increased efficiency and you could make room for the higher costs. The problem with it, and it has been shown by the National Bed Inquiry, is that the efficiencies have pretty well tailed off since the mid 1990s. In other words, the bottom line there is that you have a capital finance strategy that is at odds with your health care needs assessment and that is a very serious problem.

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