Examination of Witnesses (Questions 500
THURSDAY 15 NOVEMBER 2001
500. Even though your PFI was value-for-money
you had to make it smaller because?
(Ms Herbert) That would be an over statement. All
I am saying is there is more pressure in the system to reduce
beds if you have a PFI scheme. I am by no means saying it is the
driving factor, that would be totally incorrect.
501. If it had been a public sector scheme would
it have been a bigger scheme?
(Ms Herbert) I could not say that either. I would
just say there is more pressure to get the scheme affordable,
in my view, if it is a PFI.
502. Why is there more pressure if it is supposedly
(Ms Herbert) The value-for-money issue, I would suggest,
is quite marginal, it is based on a number of assumptions, including
risk transfer, and the other things we have mentioned.
503. Is it because you were not offered smoothing
monies early enough?
(Ms Herbert) No. I would say that we were always going
to be under pressure at the time that we did our PFI to reduce
bed numbers and to make the scheme affordable in the sense that
it actually cost the health economy less after the reconfiguration
than before. I am also saying there was, to some extent, more
pressure on us, I could not quantify it, maybe 10 per cent more
pressure because of the PFI, because of the front loading of the
cost despite smoothing monies to help that along.
(Mr Deegan) It is a slightly different position in
Central Manchester, and demonstrates the difference between PFI
schemes which were up and running prior to the major expansionist
philosophy from the NHS Plan and those planned in the last year.
In our scheme we are looking at how we can meet all of the access
targets in the NHS Plan, the demand of the National Service Frameworks,
so we are sitting down with our staff and PCTs and other colleagues
to work that through. In our written memorandum of evidence we
said there would be an extra 100 beds; there is acutally 190 extra
beds and ten extra theatres.
504. Would there have been even more if you
were looking at a public sector scheme?
(Mr Deegan) It would be the same analysis.
505. Professor Pollock, you have argued very
strongly about the future of PFI, have you any comment on the
comments you heard from your colleagues to your right?
(Professor Pollock) I think there is absolutely no
doubt that the affordability problems drove this, especially when
you look at the planning and the full business cases of many of
the trusts. I think also there is no doubt that since the National
Bed Inquiry the government has realised the political significance
of beds, there has been a massive reversal in policy. You have
seen that in the policy that was published following the National
Bed Inquiry a year ago last June. It should be no surprise that
we are looking at a situation. Beds are still closing, even this
year NHS beds closed, this time it was only 300 or 400 hundred
506. Are you saying that because of the change
of policy PFI is now producing more beds?
(Professor Pollock) No. I am saying two things, one
is that the implication of debt finance and capital charges put
a massive pressure on trusts and led to bed closures. This was
compounded and exacerbated by the fact that trusts got into PFI
deals, I think South Manchester confirms that. That was revealed
both in the business cases and also when we talked to people you
could see that very clearly. The government is now clearly very
sensitive to this issue and is taking steps to try and remedy
it, although I think in Carlisle there is a private hospital being
built in the grounds at the moment.
507. It is very, very important and crucial
to our argument that there is no doubt there is a correlation
in time between the reduction in bed numbers in all hospitals,
whether they are new ones or old ones or ones that are about to
be built, and it was so early in the days of this government as
well when there was pressure to reduce the number of beds. People
were told they had to increase efficiency and throughput and get
98 per cent efficiency, and things like. This was happening at
the same time as PFI was, new schemes were coming in. What you
are saying is that PFI reduced the bed numbers more, because there
were PFI schemes, than similar hospitals elsewhere were doing.
We know that PFI was unpopular, if you go around and ask people
in the health community they are immediately going to look for
a reason why bed numbers are going down. Is that PFI that is doing
it? You know as well as I do you can correlate all sorts of things
with all sorts of things, what is important is establishing some
type of causal relationship, and that is what is really missing.
We went to Durham, where you say it is very clear that that is
what happened, and the people at Durham did not necessarily agree
508. With the exception of UNISON and the Hospital
Consultants Association, who have been advised by your union,
the health managers were saying it would have been the same as
(Professor Pollock) And they are being advised by
509. There is a correlation in time between
the reduction in bed numbers, the time we are talking about when
PFI was beginning to get up and off the ground and starting, that
is obvious, but is there a causal relationship between the two?
That is what we really want, real evidence to say that that is
(Professor Pollock) You have to remember that formally
before 1991 planning for new hospitals was taking place at regions
and health authorities. The planning tiers were stripped out and
the expertise was lost, and that is really regrettable, because
they did it on the basis of needs assessment. Anybody that looked
at the regional planning will be so impressed by the rigour.
510. I think it was a great mistake to reduce
the bed numbers.
(Professor Pollock) The second thing that happened
was the planning function, along with the responsibility for investment,
was devolved to trust. Trust did not have the capability, all
they wanted was to secure a PFI to guarantee their future. What
they did was they went out to management consultants. From our
look at the full business cases many of those management consultants
were not competent to do proper planning. There are two problems,
some of the trusts, like Carlisle, did not even have planning
of beds and proper estimates of case load. In others like Norfolk
and Norwich the planning went so badly wrong that they had to
revisit those schemes twice. The planning was pretty abysmal.
There is no doubt there was a complete dislocation of planning
from the needs of the population. The financial issues drove everything,
the issue of affordability and the main thing for the trust was
to get a hospital assigned to secure their future for 30 years.
Even in my trust I saw ridiculous performance targets, length
of stay, day case assumptions being made in other to rachet down
the case load to fit with the number of beds they could provide.
Time and time again, and clinicians will tell you, these processes
arise. I think the full business case together with the financial
material provides very, very good data and the evidence of the
downsizing and the NHS.
(Ms Herbert) Can I say, what you are saying certainly
does not feel to me like what happened in our trust. I would say
that we planned this to the nth degree in terms of patient flows
and we worked very hard to make sure that what we were planning
was underpinned sensibly on the basis of population, population
needs and the usage of beds. I would say that NHS professional
managers, by and large, were extremely keen to make sure that
they had new hospitals but for very good reasons, to address issues
of risk in patient care, in our case, by trying to manage two
hospitals miles apart and having to move patients or critical
clinical staff around the place to make sure we could deliver
safe clinical care. What we were doing was something that I believe
was important in terms of improving the service to patients and
it was certainly properly planned.
(Mr Deegan) Just to follow on from the last contribution,
again a very similar position in Central Manchester, there was
a great deal of planning, 12 clinical user groups were actually
involved in the detailed specifications. Also, the key indicators
around bed numbers, theatre numbers, occupancy rates and projected
length of stays they have all been signed up by the clinicians
in those particular areas.
511. Finally I wanted to ask Professor Pollock,
without accepting that bed numbers reduced because of PFI historically,
is there anything in the system now that is still contributing
to reductions in schemes funded by PFI?
(Professor Pollock) I have not looked at any recent
schemes but I think the whole issue comes down to affordibility.
When you see the cost of capital rising from 9 per cent to 20
per cent something has to give, it has to be staff and it has
to be services, that is the bottom line, unless you are going
to expand your budget massively in order to accommodate that,
and there is no sign of that happening.
512. That will make things much more open. If
the cost of property is removed from the equation you are then
faced in the trust if you have a new initiative that you want
to follow up you cannot say, we do not have the money let us not
paint the wards or fix the roof this year. You have to make the
decision either to get more money or change something else.
(Professor Pollock) You are asking a question about
how trusts deal with maintenance.
513. I was responding to what you said, I forget
how you actually put it.
(Professor Pollock) There is no flexibility left.
You have gone from 9 per cent to 20 per cent
514. That is exactly my point, there is no flexibility
left in terms of not deciding to do maintenance and you are then
faced with a choice, and there are all sorts of ways of getting
round that, like putting taxes up and various other ways, you
are faced with a choice, you have an honest choice to make.
(Professor Pollock) I do not think it is terribly
honest because the way trusts are now configured is they only
have financial duties, they only have to break even to please
the government. I do not think it is honest because it is not
explicit the extent to which services are being cut and needs
will not be met.
515. As somebody who comes from an area which
suffered probably more bed loses than anywhere else in the United
Kingdom as a result of the Bottomley Initiative, having looked
at the various private finance schemes that we have seen I accept
that most of that massive reduction in beds came about before
the levelling of the PFI contracts. In almost all of the ones
we have seen there has been a further reduction in beds between
the publication of the outlined business case plan and the final
bed numbers. Whenever we have asked questions about that it has
come back to the fact it has been driven by affordability. There
has also been, I think, a greater pressure within some of the
newer hospitals because it was then argued that you can get those
greater efficiencies, throughputs and shorter stays etc, all of
the myths that lead to Mrs Bottomley's disastrous policy in the
first place. Having recognised that we do have too few beds, as
the National Beds Inquiry has shown very clearly, how much easier
is it or economic would it be to redress that by increasing the
capacity, coming back to flexibility, within a PFI scheme than
it would have been under an efficiently managed and professionally
financed operation? How much easier would it be to reopen and
re-staff those wards that were closed?
(Ms Jackson) We have not approached planning for our
scheme as a private finance scheme or a publicly funded scheme
in terms of its capacity. All of the planning was done on the
basis of demand and activity levels. We have also tried, as Julia
Drown suggested, to reorganise the way the services are provided
so we can provide the services more efficiently. We have not only
increased the number of beds to take account of the large increase
in case load but we have also changed the way the services are
provided by using some of those beds a lot more efficiently to
provide dedicated day case and short stay facilities.
516. I became quite unpopular in my own area
for a number reasons, one of them was when we made the outline
bid for a capital scheme there was a big debate in my area about
beds and I was arguing very strongly that current assumptions
on beds are based on the fact that we do not have any proper planning
preparations in relation to the connection between the Health
Service and local government, the other was because we have two
separate organisations, one is health and one is social care and
we have this nonsense that wherever we go we find people in hospital
beds who do not need to be there. It is very interesting that
when we went to both Durham and Carlisle the one big point they
made to us about lessons to be learned was there needs to be a
whole systems approach to planning PFI schemes. In a sense, it
sort of reinforced my view that when we argue about bed numbers
you have not just to look at the acute sector you have to look
at your whole local health economy and social care. What is the
experience in Manchester? You must hear better from there than
your colleagues to your left. I do not know the detail, I do know
your area a little bit, of the difference in hospitals, what connection
was there to ensure there was planning about the wider of use
of intermediate care provisions, et cetera?
(Ms Herbert) There was a very big contrast about four
years ago when the social services and the acute trusts were really
at loggerheads and not working together. At that time we had large
numbers of individuals in acute beds who did not need to be there.
The situation has completely changed and there is now extremely
good joint working between social services and certainly our trust.
517. Were they involved in your capital project?
(Ms Herbert) No.
518. That is very interesting. Why not?
(Ms Herbert) Pass. I do not think we thought of it.
(Mr Deegan) On our Strategic Board are the Primary
Care Trust and the City Council. It is the Manchester Health Authority
that has the responsibility to align the plans around the acute
beds, the point you make, plus the intermediate care beds. It
is their responsibility to look at the National Bed Inquiry recommendations
across the whole piece. There will be expansion in certain areas,
there has been investment in rehab beds and sub acute beds as
519. In terms of your project team for your
scheme are the social services engaged with you?
(Mr Deegan) At City Council level but not from within
the director of social services team.