20. I have been carefully listening to all these changes which will be effected in terms of consultants and their future contracts. I understand that a huge amount of work will have gone into this because these must have been very, very delicate negotiations. Has any assessment been done so far at all as to the likely impact of these changes on recruitment? It is said that youngsters coming into this profession now might be put off staying in this country. I wondered whether any work had been done so far. Also, will there be any opportunity for the way this is being dealt with to be reported to Parliament so it could be monitored? It just seems to me that consultants generally are absolutely crucial to the National Health Service and if these new plans go wrong, how are we going to change it?
(Mr Milburn) Let me deal with the second question first and then come back to the first one. What we have is a framework agreement with the BMA, behind which lies a huge amount of detail because we have been in negotiation for 16 months and it feels longer. There is a copious amount of detail and there is more work to do on some of the detail, of course there is. The BMA will want to determine how best they get endorsement from the consultant body for framework agreements and the further detail that we have. Implementation will not begin until April 2003, because it is going to take some time to work through some of these issues and make sure the funding is right for them and so on. In terms of monitoring, we shall want to monitor very, very carefully. One of the discussions we have been having with our colleagues in the BMA is how best we can get the implementation put in in such a way that it does not destabilise the system. It is a big change, as the Committee is recognising, when put alongside the other changes we are going to introduce. This is one of three big pay reform negotiations which have been ongoing: we have the GPs one, where again there is a framework agreement and it is out to ballot at the moment and then there is further work to do; finally there is Agenda for Change, which is the other element of pay reform for nurses, porters, cleaners and everybody else. We have to get it right in terms of the implementation. However difficult it has been to get agreement over the last 16 months, this has been the easy bit. The difficult bit is the implementation. If you are asking whether the Committee can have sight of our monitoring of how it is going, that is not a problem. I do not know what you would want to have, but if that is what you want to have, that sort of thing is fine. What was the first question?
21. I asked whether there had been any assessment done of the likely impact of losing all the talent abroad.
(Mr Milburn) I think the reverse of that. The first thing to say is that the number of applications to medical schools is up, which is really good and that is going in the right direction and is extremely welcome.
22. Are the numbers up before this contract?
(Mr Milburn) Yes, because it has not been implemented yet. This has always been the argument that people have been putting to us that one of the best ways, not perhaps the exclusive way, of facilitating better recruitment and retention is to offer better rewards for people, particularly those who are doing well and that is what this does. It offers better rewards for people, provided they hit the job plan, abide by the new rules, demonstrate that they are giving the NHS and NHS patients what they need. So there is something in this for NHS consultants, really something in it for NHS consultants and that is why the BMAI do not know whether they have been crowing or notwill be pleased about it, just as I am pleased about it. It is a good deal for NHS patients and NHS consultants. We have probably done further modelling work.
(Mr Foster) May I give you a slightly dry and dusty answer to your question. There are workforce economists who study motivation factors in relation to what they call participation, by which they mean not just recruitment but also retention and indeed return of people who have left to have families or whatever. There is a series of motivating factors here which we have been able to build into our calculations as to how this will help with expanding the NHS workforce. For example, there are some economists' figures which say that for every one per cent you put into salary, there is typically an effect on the workforce participation of 0.25 per cent. These are not NHS specific figures, these are general workforce modelling figures which have enabled us to make certain assumptions. The two other key things of course are that the new step series of salaries means there is a motivation over 20 years to pass through each of those thresholds, to continue to increase your earnings and of course increase your pensionable earnings. So there is a very powerful motivating factor through the salary thresholds. Thirdly, through the annual job plan review, work plans will be specific to a consultant's age. We shall be seeing a series of phases of careers where older consultants will be encouraged in the later phases to remove some of their more onerous on-call duties for example, change the balance of their clinical commitments into things like teaching and research.
If it did not turn out as you had hoped, is there some sort of mechanism for fine tuning it?
(Mr Milburn) It is called renegotiation. Maybe you can get somebody else to do thatthat is not an offer. We have negotiated the contract.
23. If I have understood what you said, this should all be implemented by April next year.
(Mr Milburn) We shall start implementation in April 2003.
24. What is the transition or migration process?
(Mr Milburn) Some elements of the contract, because they are difficult, will not be implemented fully until 2006, other elements will be implemented straightaway. Remember that there are two classes of consultants. First of all we have the existing consultants on their existing contract, they have legal entitlements on their existing contracts. As it happens, I think that a lot of existing consultants will want to come over to the new contract because it is better for them. In the end that has to be a matter of choice for them. We cannot make it mandatory; it has to be voluntary, of course it does because that is their legal entitlement. The second group are newly qualified consultants and as they start coming through they will go automatically, presuming that all of this is finally agreed and endorsed, onto the new contract of employment. It is absolutely true that there is some phasing of it. We want to begin the implementation as soon as we can and the most sensible date that we came up with was the start of the next financial year, given where we are in this financial year.
25. From what I hear, you say the agreement sounds better than you expected it to be. If that is the case, would you be revising any other targets in the NHS Plan on the back of that?
(Mr Milburn) No. I shall be very happy when we hit the targets in the NHS Plan and we are making good progress towards them. I think this will help us achieve what the NHS Plan sets out to do. It is just self-evident. If as a consequence of this we can get more, for example, of a surgeon's time, for NHS patients, then that means we can get more operations done. People will say that is all about targets. Forget the target. The last thing which is in the mind of the patient is the target. What is in the mind of the patient is getting the operation. That is what they want. It will help us deliver that and that is why for me it has always been an important part of the NHS plan, all of these pay reforms are. People say pay is a waste of money and all of this nonsense. It is not. Unless you can get the incentives right for people and the contracts of employment right for people within the NHS you are not going to deliver the improvement. The NHS is a people service, it is all about how 1.2 million behave. Unless we can get our key groups of employees behaving in the right way and their energies focused on what really counts, we do not get the result that counts with the patient. No, I do not think we shall be revising it. In terms of whether it is better than I thought it would be, in all candour this has been a big negotiation and it has been a very long negotiation and at times it has been quite a difficult negotiation; it is bound to have been given the scale of what we have been doing and the fact that it has not been revised for over 50 years. This is dealing with the legacy of the creation of the National Health Service in 1948 by Nye Bevan and there are some bits of that legacy which needed revising and this is one of them. I think it has gone very, very well indeed. I think it has gone well from both points of view. What would be wrong in my view would be for anybody to go around crowing victory and this is a fantastic result and so on. It is a good result for the National Health Service and in order for it to be a good result for the National Health Service, it has to be a good result for the patient and for the consultant.
26. Is it possible to quantify what it means in terms of extra time to the NHS, in terms of whole-time equivalents?
(Mr Milburn) Fourteen per cent for maximum part-time consultants. There are some other figures. Of course at the moment NHS consultants work more than their formal schedules and under the new arrangements nobody is going to expect to see an NHS consultant watching the clock, downing tools in the middle of treating or operating on an NHS patient. That is not how NHS consultants work now, nor will it be in the future. At the moment they are contracted for 38Ö hours: in future they will be contracted for 40 hours, the maximum part-time. Because they will convert effectively into full-time employees, we shall see an increase of 14 per cent in the time available. Overall I think the incentives are now in the right place. The incentives are to get more by doing more and that has to be right.
27. I welcome your comments about pay and morale and improved patient care, but they seem somewhat at variance with the messages which were going out at the time of the announcement about the increased spending and particularly the reaction of the Royal College of Nurses to some of the statements you made that money was available for front-line services and not for increases in pay.
(Mr Milburn) No, that is not why. I went to the RCN congress to try to correct the view which seemed to be abroad that somehow or other there were going to be bumper pay rises around for nothing. What I set out was what we called a series of acid tests for how money has to be spent. In order to spend this money wisely and well, what we have to getand this applies to pay as to anything elseare improvements in productivity, improvements in performance and more patients being treated. This passes that test. It passes the test because by investing the money what we are doing is buying more of the consultant's time, crucially in those first seven years, having the exclusive first call on their 48 hours. As you know, the reason for that is that that is the time in an NHS consultant's career when they are new, when they are most energetic and I want them being energetic for the benefit of NHS patients. We will apply exactly the same tests to our other pay negotiations whether that is for GPs, for nurses, for porters, for cleaners or for anybody else.
28. Do you accept that if nurses in particular are dissatisfied with their pay and their conditions and the morale is low, productivity is not like to be as good as it could be if morale were higher?
(Mr Milburn) What we have to get, as we discussed extensively with the trade unions representing nurses and other members of staff, is a pay system which is fairer and encourages more recruitment and more retention of staff but which gets improvements in productivity as well because we know that we can gain improvements in productivity; we can with consultants and we can with other staff as well and that has to be the nature of the deal. The deal here is a something for something deal. It is not that we are just paying out money. We are not going to do that. If that had been the bargaining position of the British Medical Association, I would not have agreed the deal. I have agreed the deal because I am getting something back and exactly the same discipline has to apply to other groups of staff.
29. Has this to be sold to the rank and file or is it something which is fairly well agreed?
(Mr Milburn) I do not think I am the best person to do the selling necessarily.
30. It will presumably be voted on.
(Mr Milburn) I do not know what they are planning to do.
(Mr Foster) Over the next few months the BMA will be carrying out a consultation amongst their members before formally accepting the offer.
31. I should like to make a general point before we get into some of the specifics of delivering the NHS Plan. As I am sure the Secretary of State would accept, there is a series of targets, 91 in fact, with completion dates which arise out of the NHS Plan of 2000 delivering the NHS Plan of 2002, the Labour Party Manifesto of last year and the NHS Cancer Plan. As you would expect from the timescale there the completion times go from four in particular in 2002 right through to 2010, which is not unreasonable. Would you care to comment about some of the targets which are coming up this year? For example, if one takes the 2002 target of 3,000 extra heart operations by 1 April 2002, the number of heart operations actually carried out was 2,400 extra operations. If one takes the target for 2002 of one third of GPs to be working PMS contracts by April, I should be very grateful if you could confirm that target has not been met, or otherwise as the case may be; the target for all GP practices connected to NHS net this year; the target of 100 rapid access chest pain clinics by April. What I am interested to know, if one is going to set targets to achieve, which I would not say was an unreasonable objective, if they are not being met, or have not been, the operations one in particular has not
(Mr Milburn) The heart operations one has; it has been over-fulfilled.
32. As I understand it, the target was 3,000 extra and there have been 2,400.
(Mr Milburn) No, we have done more than that.
33. If that information is wrong, I should be grateful if you would let me know.
(Mr Milburn) Seriously and fundamentally wrong.
34. If you could provide the evidence, I should be grateful.
(Mr Milburn) I cannot remember the heart operation figure, but as it happens I can remember the chest pain clinics one.
35. Hang on, if you cannot remember the heart operation one, how can you tell me that my figures are wrong?
(Mr Milburn) I cannot remember the figure, but I know that it has been fulfilled. On the chest pain clinics, 167 have been set up. I think we said there were going to be 100. That is an over-fulfilment rather than an under-fulfilment on anybody's count. Let me answer the specific and then deal with the general point. On PMS for example, I think it is true that we did not reach one third. I think we got to around 27 per cent. If that is wrong I shall correct the record, but it is around that number. What hit that was the fact that we were in extended talks around the GP contract and not surprisingly there was some uncertainty. Your general point however in relation to targets and reporting and so on is right. Basically, most of the targets which people talk about, chiefly around waiting or cancer or coronary heart disease, are pretty medium or long-term in ambition because they have to be for reasons of growth and capacity, or else on health outcomes because it just takes a long time to get cancer death rates down or to narrow health inequalities and so on. When people talk about a lot of these targets, the so-called interim targets, what they are really talking about are milestones along the way and there is some of that in the NHS Plan, of course there is. We have means of reporting on that, not least the Chief Executive's report, which was produced fairly recently. You have probably seen that, or if you have not, I am quite happy for the Committee to have a report which indicates where we have got to on a lot of these things. We shall keep reporting. Personally I think we have got quite an opportunity, to tell you the truth, because now that we have a longer term settlement for the NHS over five or six years, at one level that is great for the Department of Health, I know how much money I have so that is fantastic. The problem is that the PCT out there does not know. What I am going to do later this year is allocate three years of money to primary care trusts in one fell swoop. In other words, when we do the allocations for 2003-04 which we shall do later in this financial year, it will be for 2004-05 and 2005-06. What they will have is the money for three years. The reason I think that is important is that sure, where there are milestones, we should hit them, but it also gives a bit of flexibility for the local health service as well to know that by 2005-06 they will have to have done X, Y and Z and how best they can plan to do that over a more sensible medium-term planning horizon. As you know, what has bedevilled the National Health Service is short-termism. There have been ups, downs: it used to be annual planning cycle, annual pay rounds, three-year deals and so on. We can move away from that. All I would say is that that does not mean we should not report, but what it does is create greater flexibility for the local NHS to plan for the medium term, which is where most of these changes are going to be.
36. Would you be kind enough to send me as soon as conveniently possible in connection with Chapter 14 of the NHS Plan, how many extra heart operations there were up to 31 March this year?
(Mr Milburn) Yes, we will.
37. Could we all have that information?
(Mr Milburn) Yes.
38. May I take you on to an area that needs a certain degree of clarification and that is the proposition for foundation hospitals. There is a certain degree of public misunderstanding and lack of appreciation of how they are going to operate. If they are going to be liberated from ministerial intervention, how are they still going to be held accountable to the public and to Parliament?
(Mr Milburn) In terms of accountability, they will be subject to regulation and what we are proposing, but you will appreciate that there is more work to do on this though I can give you an idea of the thinking, is that the new Commission for Healthcare Audit and Inspection (CHAI) should become the regulator and should have responsibility for overseeing the work of NHS foundation trusts. It will report and it will report amongst other things annually, independently to Parliament, including on the performance or otherwise of the individual NHS foundation trusts. In terms of accountability to Parliament, we thought a lot about this. Clearly what we cannot have is my powers of direction disappearing and with that accountability in terms of the overall performance of the system to Parliament. There are three locks there. The first lock is that I will have overall responsibility for the healthcare system in the country and I shall be held to account for it by this Committee and by Parliament as a whole and that is right and proper, including for the performance of foundation trusts if that is what people want to talk about. Second, the Committee, if it wanted to, could summon individual NHS foundation trusts to account for their performance and ask questions of them. Third, we would be proposing to give the National Audit Office access to NHS foundation trusts so that the proper accountabilities are in place, including to the Committee of Public Accounts as well as this Committee. I do not want the Committee to feel that somehow or other parliamentary accountability is going to be diminished, because it is not.
39. How do you respond to the charge that the establishment of foundation hospitals will lead to the perception of two-tier care in the acute sector?
(Mr Milburn) I just think that is wrong. Let us take a slight step back. What characterises the acute sector today, prior to any NHS foundation trust, is a huge variation in performance. You might want to call that two-tier care, you might want to call it 180-tier care, depending on the number of acute trusts. Everybody is acutely conscious of that and it is always the problem that most bedevils policymakers and decisionmakers: as Nye Bevan said 52 years ago, "How can you make sure that you generalise the best?". How can you do that? In order to do so, you have to have a wide variety of levers and one of the levers is that we have to move to a situation in my view, based on the experience that we can see elsewhere in Europe and indeed elsewhere round the world, where the organisations which are doing better get more freedom to get on and become even better still. Recently I held a seminar with so-called foundation hospitals, although their model is not exactly the same as ours, from Sweden and Spain and other countries in Europe. We brought them here and got their people to talk to us. What is so striking about it is the ability to manage. The ability to get on and organise the institution and organise its performance, free of day to day interference from people like me or from these guys makes a profound difference to the performance of any organisation. It is just like anything. If you are more in control of your own life you tend to perform better as an individual. That is true of organisations too. NHS foundation trusts will have that freedom. What we will do explicitly is free them from Secretary of State direction. I will not be able to direct them. The way they will be held to account is through the regulatory route, the Commission for Healthcare Audit and Inspection, and through the commissioning route. The PCT, if it wants to, will commission services from the local foundation trust and the foundation trust will have to account for its performance back to the PCT, back to the local community as well as back to the regulator. As you know, we are proposing as well and are doing some thinking about how we can strengthen the local governance arrangements too. I said to this Committee before, I am personally not convinced that the best way of encouraging the best community involvement between the local community and local hospital that serves it, is simply by an independent appointments commission appointing five non-executive directors. I do not think that is the best way of doing it. I really do not. What we need to see is better relations, closer working relations between the community and the hospital, between the trusts. We have to think about the governance arrangements. If in a sense the public accountability through me is being moved sideways, then the quid pro quo is that there has to be strengthened accountability between the local community and local trust and we have to do some thinking about the best way of doing that. For example, we could have a two-tier board structure with stakeholders from the local community, representatives of staff who are currently not represented at all on trust boards, maybe the democratically elected local authority, maybe local businesses on a council of trustees wider board, which is more the European model than the English or UK model, with a board of management who would be experts getting on and delivering the improvements patients want to see. That is where our thinking is. Final point. These are there to serve NHS patients. They are part of the NHS family and there job is to provide care according to NHS principles and NHS values, free according to need and not ability to pay.