Select Committee on Health Minutes of Evidence

Letter from the Parliamentary Clerk, Department of Health, to the Clerk of the Committee (PS 1A)

  Thank you for your letter of 19 December. This letter sets out the Department's response to the Committee on the questions asked and provides some further information outstanding from the first evidence session of 24 October 2001. I am sorry that the Committee has not received this information sooner.

  The Committee has asked for a note on how the £20 million assigned to the concordat has been distributed across the country and whether it has been distributed according to where people had relationships with private sector partners or according to need (question 1).

  The money was provided to health authorities in November 2000 and was used to purchase over 10,000 operations from the independent health sector during the winter 2000-01. The distribution was based upon the number of NHS cases that were outstanding and needed to be undertaken and also the availability of independent sector capacity to undertake the work. This helped to ensure that elective activity rates remained as high as possible.

  Information on the specialities involved is not available. The cash distribution is as per table below. The table also shows the amounts made available from NHS sources for Local Authorities to address social care issues during that period. The exact number of delayed transfers of care that directly resulted from these transfers is not known.

NHS Region Social
Care Allocation
Private Sector Allocation £'000s
No of Cases Commissioned
North West
Northern & Yorkshire
South East
South West
West Midlands

  The Committee has asked for our assessment of the relationship between the Commission for Health Improvement and the National Care Standards Commission (question 2). The Department recognises the need for the Commission for Health Improvement and the National Care Standards Commission to work closely together with respect to independent health care.

  However there are distinct differences between the two bodies:

    —  The NCSC is a regulatory body and effectively licences care providers, CHI is not a regulatory body.

    —  The NCSC is mainly concerned with social care services and health care services make up a small proportion of the regulated services.

    —  The NCSC will cover a wide range of independent health care ranging from acute hospitals, through private doctors to cosmetic surgery. In many of these regulated settings no NHS patients will be treated.

  We do recognise the need to ensure that there is close collaboration between the two bodies and the two chief executives have met to start putting in place such arrangements. These arrangements will need to ensure that both bodies co-ordinate their inspection/review programmes in relation to independent health care and share information about their findings with respect to such services.

  The Care Standards Act also includes a power at Section 9 which allows regulations to be made for either organisation to delegate functions to the other. As only the NCSC is a regulatory body the NCSC could only delegate inspections of independent health care services to CHI, and not their full regulatory duties which include registration, complaints investigation, enforcement action and de-registration. The Department is discussing this delegation power with the chief executives of the two bodies. However, as the NCSC is not due to commence its statutory duties until 1 April 2002, and is still being set up, this is unlikely to happen from this start date.

  In question 3, the committee has asked about changes in capacity over the last five years in terms of:

  (a)  The number of staffed in-patient beds by region and specialty.

  (b)  The number of day surgery beds.

  (c)  The number of whole time equivalent consultants by region and specialty.

  (d)  The number of operational operating theatres.

  (e)  The number of surgical interventions by region and specialty.

  (f)  The number of available but not staffed in-patient beds, by region.

  (g)  The number of available but not utilised operating theatres.

  The Committee has also asked whether any studies have been undertaken to identify what additional capacity could be available and at what cost within the NHS (question 4).

  The Secretary of State is keen to extend capacity to treat NHS patients. That is why the NHS Plan announced:

    —  7,000 extra beds by 2004, of these 2,100 in general and acute wards;

    —  5,000 extra intermediate care beds;

    —  7,500 more consultants;

    —  20,000 more nurses.

  Some of this investment in additional capacity can already be seen. For example there are over 250 additional operating theatres, an increase of 12 per cent, since 1997. As a result the number of operations has increased by over 500,000 in the same period. At the same time 300,000 more emergencies are being dealt with every year. The NHS Plan also announced a major expansion in new hospital building.

  Capital investment is reshaping services. We are developing diagnostic and treatment centres, some in partnership with the private sector, to increase the number of elective operations which can be treated in a single day or with a short stay. Twenty of these centres will be in development by 2004, by which time eight will be fully operational, treating around 200,000 patients per year. We expect a number of DTCs to be in operation by the end of next year.

  In addition to increasing capacity for NHS patients using both the public and the private sector the Secretary of State has set up the Modernisation Agency to improve services for patients. The agency's work includes encouraging service redesign so that better use is made of existing capacity.

  In response to the specific questions:

a.  The number of staffed in-patient beds by region and specialty

  This information was submitted to the Committee on 28 September 2001 as part of the Department's written evidence for the Public Expenditure Enquiry 2001.Table 4.14.1, attached again as a Appendix A for ease of reference, shows the five year time series by region of available, and therefore staffed, beds. The Department does not classify beds by specialty, but on a broad wards classification, as shown in table 4.14.1

b.  The number of day-surgery beds - Table 4.14.1 also contains details of beds in dedicated day case units.

c.  The number of Whole Time Equivalent consultants, by region and specialty - A table giving this information is at Appendix B.

d.  The number of operational operating theatres-


Northern & Yorkshire
South East
South West
West Midlands
North West

  Source: Department of Health return KH 03.

e.  The number of surgical interventions, by region, by specialty

  Information on surgical interventions (operations) comes from the Department's Hospital Episodes Statistics (HES). This gives the number of finished consultant episodes, ie periods of care under one consultant in one health care provider. The attached tables provide the information. However, there are some discontinuities in the time series of information requested due to changes in regional boundaries in 1999 and some coding of specialties. Figures for England are shown in the table in Appendix C.

f.  The number of available but not staffed in-patient beds, by region - There are temporary bed closures where there is staff sickness or shortage. For example, on 30 November 2001, 0.6 per cent of total NHS general and acute beds were temporarily closed due to staff shortages/illness. The table below shows the number of G&A beds temporarily closed due to staff shortages. The figures are from the Winter Bed Census 2001. This is the first time this type of information has been collected in the bed census.


Northern & Yorkshire
South East
South West
West Midlands
North West

  Source: Department of Health Winter Bed Census 2001.

g.  The number of available but not utilised operating theatres - We do not have this information.

  Question 5 asks whether the Department has considered what additional capacity could be made available if consultant contracts were made full time? What would be the additional salary cost?

  Only 12 per cent of consultants work part-time (HCHS medical and dental consultants, England at September 2000). If all these consultants worked full-time this would, in theory, give an additional 6 per cent consultant hours for the NHS, equivalent to 1,500 wtes. This would add £120 million to the consultant paybill, excluding on-costs.

  However, consultants choose to work part-time for a variety of reasons, including domestic responsibilities, and many part-time consultants have no private practice earnings. Not all would be able to commit to working full-time, and the end effect of making consultants work full-time would be that some of these staff could be lost to the NHS as consultants.

  The Committee may be thinking of consultants on maximum part-time contracts, where a consultant foregoes one eleventh of whole-time salary, in return for the removal of restrictions on private practice earnings. The same work commitment is required from consultants on whole-time and maximum part-time contracts, both of whom are expected to devote substantially the whole of their professional time to the NHS. The evidence does not suggest that maximum part-time consultants are less productive than those on whole-time contracts.

  The Committee has also asked what are the barriers to requiring full time contracts for all new appointments and whether the Department has considered making the acceptance of a full time contract a condition of accepting a training position within the NHS.

  The Department has considered this but has concluded that imposing compulsory full-time contracts would be counter-productive. The number of female doctors is increasing rapidly as more medical training places are taken up by women. The Department is keen to ensure that the expertise of doctors is not lost to the NHS, particularly at key moments of their lives, eg when they wish to raise a family. There is a concern about the lack of flexibility for NHS staff who wish to combine a fulfilling career with domestic responsibilities. At present, there are significant numbers of doctors who are not actually working for the NHS because they feel unable to combine work and domestic commitments. Requiring newly trained doctors to work full-time may provide some additional medical time but there is a strong risk that this would be outweighed by time lost to the service, temporarily or permanently.

  The Department is working under the Improving Working Lives programme to offer more flexible working conditions for all staff, including doctors. Offering more flexibility will enable NHS staff to maintain career continuity throughout the course of their working lives. The Department believes that requiring staff to commit themselves to a full-time contract as a condition of accepting a training position within the NHS would exacerbate rather than alleviate the shortage situation.

  The Committee will know that we are currently negotiating with the British Medical Association on a new consultant contract. The Government wants to use the new consultant contract to maximise consultants' contribution to the NHS, but this does not mean preventing doctors from working part-time if they wish to do so. The challenge is not so much to make consultants work longer but to manage their time more effectively. Too many consultants still do not have job plans. Job planning, supported by the agreed appraisal system, as a contractual requirement is a key feature of the new contract under negotiation. This will help ensure that consultant time and effort is most effectively focussed on service needs and priorities. The new contract and the new clinical excellence award scheme will also create a more explicit incentive and reward system linked to NHS performance and NHS commitment.

  Question 7 seeks an assessment of the retention of employment model pilot schemes in Mandeville, Roehampton and Havering. The Retention of Employment models at Stoke Mandeville, Roehampton and Havering are developing well after final UNISON agreement to participate in the pilot projects in November. Since then follow-up meetings have been held with the private sector and the trusts. Detailed contractual documentation has been sent out to trusts and bidders with the instruction that they submit their comments on the documentation before Christmas.

  Once all comments have been received and analysed, formal contracts will be issued and trusts will be instructed to invite bidders to submit best and final offers (BAFO). It is anticipated this process will take around a further month, with the evaluation taking a further month. This indicates that it is likely we will be able to let contracts, assuming that UNISON agree to the proposals and it passes value for money tests, by the middle of March.

  In addition to the three pilots, the scheme at Walsgrave has also progressed to a stage where it needs to introduce RoE principles. It is likely that Walsgrave will be in a position to also let contracts under the RoE model by the middle of March.

  Until the comments from the private sector have been fully analysed and it is possible to estimate the likely pricing implications of RoE, it is not possible to arrive at an assessment of the model.

  Question 8 asks for information about a recent survey. Statisticians in the Department have carried out a survey of NHS hospital trusts, PCT/Gs and health authorities on NHS independent sector usage. The survey was commissioned at the end of September 2001. Its purpose was to understand the volume, cost and nature of elective treatment being provided to the NHS by the independent sector.

  The survey received responses from just under half of all hospital trusts, PCTs and health authorities, with responses from a small number of PCGs, together representing about half of all NHS inpatient activity. The returning sample reported commissioning over 13,600 finished consultant episodes from the private sector between April and September 2001, and more than 15,000 planned for between October and March 2002. These cases account for an estimated 0.58 per cent of expected NHS inpatient activity over the year. The survey was commissioned before the announcement of the £40 million allocation to the NHS to buy activity in the private sector over the winter months.

  An estimated £22.5 million was spent by the survey sample on independent sector treatment for patients between April and September 2001. The survey indicated that the majority of independent sector contracts are made between hospital trusts and independent providers, although primary care trusts also play a substantive role in commissioning work from the independent sector. Rates of independent sector usage vary widely between different regions of the country.

  The Department will make available publicly further information from the survey on the type of procedures making up the volume of cases commissioned, also more detail on prices obtained by the NHS. We also intend to re-run the survey to obtain actual data for 2001-02 and planned activity for 2002-03.

  The Committee may also be interested to know that the Independent Healthcare Association collects data from its members. This shows that since November 2000 at least 75,000 patients have been treated in the independent sector, paid for by the NHS. This figure includes outpatient appointments, day cases and inpatient treatment. A breakdown by type of operation will shortly be placed in the Library of the House.


  At the evidence session on 24 October, the Secretary of State mentioned research done by York University (para 23 of the transcript of the session). This was summarised in the British Medical Journal: Dynamics of Bed Use in Accommodating Emergency Admissions: Stochastic Simulation Model, by A Bagust et al; BMJ vol 319:pp155-8; 17 July 1999.

  The Secretary of State promised Dr Taylor to set out the recruitment and retention position for nurses within the Worcester area (para 29).

  Since 1997 the number of qualified nurses working in the NHS in England has increased by 17,000 (headcount), I can confirm that the vacancy position in the Worcester acute trusts has improved from 117 vacancies in July this year to 59 vacancies in October. The vacancy rate has also improved within the Worcester Community Trust (from 26 vacancies in July to 0 vacancies in September). This is as a result of newly qualified nurses taking up post and the recruitment of overseas nurses.

  In order to maintain this momentum, planned future events include a recruitment open day in November for D and E grade nurses, close liaison with the local universities to improve retention of newly qualified nurses in the Worcester area, the introduction of an internal bank system specifically for theatre and critical care nurses, and the introduction of comprehensive Continuing Professional Development programmes for nurses. In addition, so far this year 12 nurses have returned to practice, there are currently 24 on Return to Practice programmes and a further 16 are waiting for courses to commence.

  Mr Austin asked for an assessment was made of the capacity of trusts to meet repayments on PFI projects. Mr Coates from the Department said that he would inform the Committee of the revenue costs of PFI schemes as a proportion of total HCHS revenue (para 93).

  Total HCHS revenue in 2001-02 is £41.465 billion (HCHS, excluding capital charges). Last year's peak revenue figure of £317 million (amounting to 0.8 per cent of 2000-01 total HCHS revenue) has risen this year to £445 million per annum. This now represents 1.07 per cent of revenue and will rise proportionately as further major schemes continue to reach financial close over the next decade. There is no "cap" on the revenue ceiling attributable to PFI projects but the proportions are reviewed each year with the Treasury.

  The total revenue cost of PFI of £445 million covers both the repayment of capital and the consumption of support services eg catering, cleaning etc. On average, half of a typical PFI contract's fee is for services. If this is applied to the above figure, it means only around £220 million is "extra" expenditure on PFI.

  Ms Drown requested a note for the committee to say how the Department values cost and time over-runs (para 97). A note of explanation on this is attached as Annex A to this minute.

  There was not time for the Secretary of State to respond to the final question from Mr Dowd, who asked for his views on why the level of returns for PFI in the Health Service has been somewhat less than in other sectors and whether this could be because of the exclusion of clinical services (para 103).

  The current PFI model has proved itself the best value for money option for delivering large acute hospitals as well as a growing number of medium sized community hospital and mental health schemes. It therefore makes sense to use PFI where it offers the taxpayer better value for money and a faster procurement rate.

  This means that we are now able to devote public capital to smaller projects, maintenance and equipment needs and specific modernisation initiatives which are more difficult to fund using PFI. An example is the upgrading of every A&E department in the country.

  We have been able to greatly increase the amount of exchequer capital available to the NHS—by the year 2001-02 public capital expenditure will have risen by over 60 per cent since 1998-99—and public capital will in fact continue to dominate the capital investment programme in the NHS, providing well over twice as much capital as will be provided by the private sector under the PFI over the period of the Comprehensive Spending Review.

  There is currently no sign that the private sector has the capacity to manage the wide range of clinical services provided by a district general hospital which would be involved in a major PFI build. A different approach to the structure of acute sector PFI schemes is not therefore an option.

  I hope that the Committee will find this information helpful.

8 January 2002

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